Head of federal public sector union worried about Ottawas silence over pensions

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HALIFAX - On the eve of a critical meeting with Treasury Board President Stockwell Day, the head of one of Canada's largest public sector unions said Tuesday he's worried the federal government is poised to take an axe to public sector pension plans.
John Gordon, president of the Public Service Alliance of Canada, said various think-tanks including the C.D. Howe Institute and the Canadian Federation of Independent Business have recently taken aim at public sector pensions, saying they are too rich for taxpayers.
With most private sector pensions taking a beating in recent years, the debate is heating up.
But Ottawa has said nothing as it prepares to deliver a budget March 4.
The uneasy silence has left public servants fretting about the future as the Conservatives search for ways to reduce a massive deficit that is expected to swell to $56 billion this year.
"Silence sometimes gets our members worried," Gordon said in an interview.
The 166,000-member union recently launched an campaign that includes a Facebook page, online petition, public rallies and the slogan: "Hands off our pensions."
Gordon, in Halifax to meet with union members, is scheduled to meet Day on Wednesday.
Day, a former Alberta treasurer known for cutting public service jobs, was appointed last month to lead the department that makes the rules as employer of Canada's public service and the country's budget office.
He is widely expected to play a key role in the government's efforts to reduce the deficit to $5.2 billion by 2014-15.
When asked if Day's appointment made him nervous, Gordon chose to be diplomatic.
"I'm not going to make a judgment on the minister until such time that we've had a chat," he said.
Day couldn't be reached for comment, but his office released a statement Tuesday that revealed little about his plans.
"As we work through this global economic downturn, our approach will be fair," he said. "During the process to build our road map to balanced budgets, I welcome all options and views."
Donald Savoie, an expert on Canadian public policy, said federal public servants shouldn't be worried about their pensions - but they should be realistic.
"It's part of what taxpayers pay for, and it's fair ball," said Savoie, Canada research chair in public administration and governance at the University of Moncton.
"It's somewhat irresponsible for people to say, 'Don't look at my spending, look at somebody else's spending."'
He said public sector pensions are considered the gold standard in Canada because they typically offer protection against inflation - a benefit rarely found in the private sector - and taxpayers pay for 64 per cent of pension contributions for PSAC members.
"They have a very rich pension plan by any standard," Savoie said.
Gordon bristled at the suggestion that his members have gold-plated pensions.
"That's nonsense," he said. "The fact is that our pension plans are sound, they're paid for by the workers, they're deferred salary ... and they should be protected."
He said federal public servants typically forego higher wages offered by the private sector in favour of better long-term benefits offered by the government.
Federal workers contribute to their pensions at a rate of 10.45 per cent of every dollar they make under $47,200 and 8.4 per cent of every dollar above $47,200.
Instead of contemplating cuts to federal pensions, Prime Minister Stephen Harper should improve the retirement finances of all Canadians by enhancing the Canada Pension Plan, the Quebec Pension Plan and old age pensions, Gordon said.
Any major changes to public sector pensions would require the minority Tories to introduce legislative changes, he said.
Gordon said he understands the government is in a fiscal bind, but the size of the deficit is directly related to its decision to spend big to stimulate a moribund economy.
"They will reap the benefits when the economy starts to recover," he said. "You don't pick one area, such as public workers' pension plans, and say we're going to fix the deficit through that. That's just not on."
However, Savoie said it's a mistake to think a healthier economy will make the deficit disappear.
"We can't wish it away and the business cycle is not going to take care of it. We either have to raise taxes or cut spending. There's no other way."

Organizations: Public Service Alliance of Canada, C.D. Howe Institute, Canadian Federation of Independent Business Conservatives University of Moncton

Geographic location: Canada, HALIFAX, Ottawa Alberta

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