Wayne’s World

By Wayne Stetski

Happy New Year! It has been three years since Justin Trudeau said on the 2015 federal campaign trail, “Obviously the Canadian government needs to work with provincial partners and a wide range of actors to ensure that we’re doing everything we can to protect people’s pensions.”

More than two years in office and one thing has become clear: Prime Minister Trudeau is not doing enough to protect Canadians’ pensions.

Pensions really are deferred wages – you pay into them while you are working in order to be financially secure in retirement. It once was fair to assume that after a lengthy career, a hard working Canadian would have a guaranteed pension. Employers and employees contributed to a plan, and when the worker retired they knew the exact amount of the monthly payout. It was guaranteed. These pension plans are known as Defined Benefit Pension plans (DBPs).

That was until the government introduced Bill C-27 on October 19, 2016. The bill removes an employer’s legal obligations to fund their employees’ earned benefits and allows for the conversion of federally regulated DBPs to target benefit plans. Under these new target benefit plans if the stock market crashes or the pension plan’s investments underperform, it is the workers’ benefits that could be reduced or premiums increased; the employer is no longer obligated to guarantee a monthly payout amount. This change could lower benefits for both current and future retirees. The conversion will result in virtually all risk of market volatility being downloaded from the employer onto employees and retirees.

To be clear, C-27 targets employers in federally regulated businesses such as banking and railways, as well as Crown corporations. For Kootenay-Columbia this largely affects workers with Canada Post, banks, telephone systems like Telus or Shaw, Canadian Pacific and Canadian National railroads, and federal government retirees.