Canada’s unions are organizing against Bill C-27 a new piece of federal legislation that enables Crown corporations and federal private-sector employers to back out of defined-benefit pension commitments.
“This bill was announced without consultation or advance notice, though it directly contradicts election promises to stabilize and improve retirement security,” said CLC President Hassan Yussuff, who wrote a letter to Finance Minister Bill Morneau outlining the CLC’s opposition to the bill.
Currently, defined-benefit (DB) pensions provide stability and security to employees because employers are legally obliged to fund employees’ earned benefits. Already earned benefits are legally protected. Bill C-27 removes employers’ legal requirements to fund plan benefits, which means that benefits could be reduced going forward or even retroactively. Even people already retired could find their existing benefits affected, after paying in their entire working lives.
The bill would also invite employers to establish inferior, less-secure target-benefit (TB) plans, and persuade individual members to give up their DB benefits in exchange for the new plan.
“Bill C-27 invites employers and other plan sponsors to abandon their pension promises to employees and retirees, downloading virtually all plan risks brought on by market volatility from employers to workers and retirees,” Yussuff wrote to Morneau. “This is an unconscionable betrayal of the legal rights and protections of plan members.”
In 2014 Stephen Harper’s Conservatives launched public consultations on a similar framework, but after overwhelmingly negative feedback from unions, retirees and other stakeholders, they scuttled the idea.
“This is very dangerous legislation that was even rejected by Harper’s Conservatives, and I’m urging the current government to abandon it now,” said Yussuff.
Yussuff noted the sole jurisdiction where employers are allowed to back out of promises to pay already-earned DB pensions is New Brunswick. Since 2012, when New Brunswick’s Conservative government introduced their legislation, New Brunswick has seen class action lawsuits, constitutional challenges, and plummeting defined-benefit planned membership.
“Instead of following the Conservatives’ example, we urge the federal government to strengthen and expand pension and retirement security. If they instead go ahead with C-27, we are prepared to work very hard to ensure Canadians’ opposition is heard loud and clear,” said Yussuff.