Day wont rule out cuts to bureaucrat wages, pensions

The Canadian Press ~ The News
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OTTAWA - Union leaders worried about looming federal cost-cutting have scored what they hope is a precious take-away from their meetings with Treasury Board President Stockwell Day - the cabinet minister's personal contact numbers.
Wednesday's move was more than symbolic.
Day's gesture of handing over his co-ordinates to the heads of the two largest federal public-service unions should go a considerable way to defusing heightened tensions between the government and its 180,000 employees, the union leaders said.
Day signalled his willingness to hash out cost-saving solutions in tandem with the unions. The union leaders, in turn, said they take him at his word, and committed to preparing their own proposals for cost reductions.
"It was very positive," said Gary Corbett, president of the Professional Institute of the Public Service of Canada.
However, Day skirted questions about whether cuts to pension benefits, wages or the size of the civil service are in store. And he suggested that everyone in Canada, including civil servants, will need to make sacrifices to get Canada's economy back on track and the deficit eliminated.
Civil servants are on edge as the government moves to tackle the growing deficit, and as complaints from the private sector about the generosity of public service pensions mount.
Morale sank quickly after Day took over the Treasury Board post last month and immediately started talking about trimming government costs.
The unions representing government employees feared Ottawa would target their pension plans, and possibly dig into wages and hiring as well - as governments in the past have done in the name of deficit reduction. They launched a national petition and campaign called "Hands Off Our Pensions" and complained loudly about the lack of communication from the government.
In a series of meetings Tuesday night and Wednesday, Day sought to bring down the level of anxiety and reassure employees there would be no rash decisions.
"Public servants can expect us to continue to work with them to maintain the integrity of these funds," Day told reporters.
"As I've said to the leaders of the public service who I've met already, we want to be working closely with them. We want to make sure our pension plans are strong and continue to be strong."
But at the same time, he warned that the economy is "fragile" and that the best bet the public service has at maintaining generous pensions is to help foster a strong economic recovery.
So while the meetings with union leaders opened the lines of communication, there was little headway on how much of the deficit burden the public service will have to shoulder, said John Gordon, president of the Public Service Alliance of Canada.
"It gives me hope that there's at least some good dialogue about maintaining the integrity of the pension plan," he said. "But what does that mean?"
Before Ottawa can do anything to public service pension plans, MPs need to take a hit, said Derek Fildebrandt of the Canadian Taxpayers Federation.
"To have the moral authority to do that, they need to lead by example," Fildebrandt said. "We want Treasury Board President Stockwell Day to lead the way on this."
Day sidestepped questions on MP pensions.
The taxpayers' lobby group has long urged a reduction in MPs "gold-plated" pensions - a campaign adopted by the former Reform party and endorsed by some Conservatives still in the House of Commons.
Fildebrandt calculates that if Prime Minister Stephen Harper was to quit at the end of this year, he'd be eligible for at least $150,244 in annual pension payments.
Former veterans affairs minister Greg Thompson, who just announced his retirement after 12 and a half years in the House of Commons, will be getting at least $170,117 a year in pensions, Fildebrandt said.
The richness of MPs' pensions highlights the growing divide between the public and the private sector, Fildebrandt added.
Public-sector unions are well aware of the pension divide, and the resentment it is fuelling in the private sector. But they eargue that the best way to close the gap is for Ottawa to reform the country's retirement income system, bolster the Canada Pension Plan and improve ways for Canadians to save.
The federal government is working with the provinces on how to best beef up retirement income schemes. Federal and provincial ministers will meet in May to narrow down the options.
The most that observers expect in the coming budget is a signal that Ottawa is still committed to that process, and possibly some tinkering with regulations that improve tax treatment for private savings.
The opposition Liberals are highly suspicious of Day's overtures to the public-sector unions, and doubt his resolve to preserve their benefits packages.
"Somehow or other it seems they want to extract something from the public service," said Liberal finance critic John McCallum.

Organizations: Professional Institute of the Public Service of Canada, Treasury Board, House of Commons Public Service Alliance of Canada Conservatives

Geographic location: OTTAWA, Canada

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