Robyn Benson, PSAC

Pensions and the hypocrisy of the CFIB



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Back in May I blogged about the precarious position of too many Canadians after retirement, and the need to reform CPP/QPP.

To recap quickly: nearly two out of three Canadians have no workplace pension plan. The average payout is about $500/month—less for a minimum-wage worker.

The CLC has made a strong case for doubling the CPP/QPP, to stave off destitution for many senior Canadians. And most Canadians happen to agree that the payout should be enhanced—and are willing to pay increased premiums to make it so.

There was supposed to be a meeting of the federal and provincial finance ministers in June to discuss the future of CPP/QPP. It didn’t happen, although pension reform doesn’t appear to be off the table.

But the Canadian Federation of Independent Business has launched a preemptive attack on the notion of increasing the pension. In an accompanying press release, the CFIB links any CPP/QPP improvements to “reform” of public sector pensions—meaning a good old-fashioned slashing of pension benefits for municipal, provincial and federal public workers.

The “bridge benefit” that has aroused the CFIB’s ire is no giveaway, as it suggests—it’s bought and paid for by joint contributions, like the rest of the pension that public workers earn during the course of their employment. And it has nothing to do with the urgent need for CPP/QPP improvements.

But worse than this red herring is the arrant hypocrisy of an organization whose members operate small businesses with low to minimum-waged employees and no company pension plans. When those workers retire, they can look forward to somewhere around $5000 per year in CPP/QPP benefits, plus an Old Age Security payment of $6600 payable when they reach the age of 65 (which, as we know, is to be raised to 67 as per the last Harper budget).

To avoid falling into even worse poverty than what is facing them, these seniors are also eligible for a Guaranteed Income Supplement that for them would amount to a little over $2500 per year.

That GIS is taxpayer-funded, and I guess you can see where I’m going with this. In effect, the taxpayers are subsidizing the same small businesses whose organization is demanding that their employer contributions to CPP/QPP not be increased. The CFIB, in other words, represents a number of shops whose employees are paid substandard wages with no in-house pension plans, and who can get away with it because the taxpayer is topping up the low CPP/QPP payouts their employees receive on retirement. But they’re complaining bitterly about a “tax levy” (increased employer contributions) to improve those payouts.

That’s neither right nor fair. They simply have no moral case to make for keeping CPP/QPP pensions at their current low levels. I suspect they know it—which accounts for their diversionary attacks on public sector pension plans.

The Canadian Labour Congress, meanwhile, continues to press for CPP/QPP expansion. No more time should be wasted: the finance ministers must convene their promised meeting as soon as possible to get the process of reform underway. Millions of Canadian seniors are depending upon the outcome of these discussions. The CFIB and its allies must not be allowed to stand between them and the dignified, secure retirement that they deserve.


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This page contains a single entry by Robyn Benson, PSAC published on August 12, 2013 8:30 AM.

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