The Conservative government is promising big savings from reforming pensions for public servants and MPs: $2.6-billion over five years and $700-million a year after that.
That’s separate from the $5.2-billion a year in spending cuts announced earlier this year by a government that is hoping to erase the federal deficit before the next election even as it faces lower-than-expected economic growth.
The pension changes were revealed Thursday in the government’s second omnibus budget bill, a wide-ranging piece of legislation that numbers 443 pages (457 if you count the table of contents). It amends dozens of federal statutes, including the Indian Act, the Canadian Labour Code and the Merchant Seamen Compensation Act.
Finance Minister Jim Flaherty promised this week his bill would have no surprises, yet it contained several measures that were not spelled out in his March budget, such as limiting the number of Canadian lakes and rivers that will be covered by the Navigable Waters Protection Act to 97 specific lakes and 62 rivers. It also renames the law the Navigation Protection Act.
The opposition parties immediately accused the government of repeating the practice of jamming a budget bill with controversial items to avoid detailed scrutiny.
Peter Russell, an expert on parliamentary democracy and professor emeritus at the University of Toronto, said Canadians need to wake up to the decline of their democratic institutions, citing federal omnibus bills and the Ontario Liberal government’s decision to prorogue the legislature this week as examples.
“It’s part of a general undermining of parliamentary democracy,” he said. “It’s for the people really to be aroused enough to rise up on their hind legs and through all their social media and say: ‘We don’t want government of this kind.’ ”
Members of Parliament to pay up for pensions
For years, the Canadian Taxpayers Federation has cried foul over the terms of MP pensions. Parliamentarians with at least six years of service can get a full pension by age 55 in the current system. Their annual contributions of $11,060 require major top-ups from the government.
The lobby group could barely contain its glee Thursday over Conservative reforms that will force MPs and Senators to pay $38,769 a year and wait until age 65 to collect. The contribution rate will be a 50-50 split between MPs and taxpayers.
“It’s the type of reform we’ve been fighting for for over 20 years,” Kevin Lacey, a spokesman for the CTF, said at a Parliament Hill news conference.
The reforms are one part of the government’s budget bill that appears to have the support of opposition parties. Interim Liberal leader Bob Rae proposed on Thursday in Question Period that the provisions be split from the bill and passed in a day.
“I will take that specific suggestion under advisement,” Prime Minister Stephen Harper replied.
Public sector feeling the pain
With more than 400,000 federal employees – including the RCMP and the military – scaling back pension-plan benefits, Ottawa is going to save a lot of money.
Rule changes will require new hires to work longer and all workers to pay more into their pensions. The normal retirement age in the public service will rise to 65 from 60, with one exception. An employee with 30 years of service can currently retire at 55. That will rise to 60. Public servants will also be moved to a 50-50 contribution, up from 37 per cent.
“By far the lion’s share of taxpayer savings from that $2.6-billion over five years obviously occurs in the public sector pension changes, because we have 420,000 public sector employees and there’s only 308 Members of Parliament,” Treasury Board President Tony Clement said.
Robyn Benson, national president of the Public Service Alliance of Canada, said the change creates a two-tier pension system and is not the right approach.
“They shouldn’t be looking at weakening any pensions,” she said. “They should be looking at enhancing all pensions.”
Waterway changes enrage environmentalists
Changes to the laws governing navigable waters will end Transport Canada’s responsibility for tens of thousands of lakes and rivers in Canada.
The proposed changes limit the Navigable Waters Protection Act to 97 lakes, 62 rivers and three oceans. That means construction of dams, bridges and other projects will be permitted on most waterways without approval from the department.
Transport Minister Denis Lebel said waterways will be protected by other federal laws and provinces and municipalities. But environmentalists and opposition MPs say the changes further dismantle Canada’s environmental protection laws.
“The destruction of the Navigable Waters Protection Act … is part of a consistent pattern of Stephen Harper trying to remove federal constitutional authorities for the environment,” Green Party Leader Elizabeth May said.
The name of the act will be changed to the Navigation Protection Act, a move officials say recognizes its “historic intent” to focus on navigation, not water.
Employment Insurance board ends operation
Ottawa’s version of the Maytag repairman is getting the boot.
At a cost of about $1.4-million a year, the Conservative government created the Canada Employment Insurance Financing Board in 2009. The independent body was meant to ensure EI premiums were set at a break-even rate and were not used to boost Ottawa’s bottom line. But during the recession, when EI costs soared, Finance Minister Jim Flaherty froze rates, and set an annual ceiling for increases.
The March budget mentioned reviewing the board’s mandate. Thursday’s budget bill suspends its operations.
It could be revived when the EI account is in surplus.
The budget bill also shuts down the Merchant Seamen Compensation Board, which adjudicates disputes over wages and benefits. The federal human resources department will take over its duties.
The work of the Hazardous Materials Information Review Commission will move to Health Canada. A spokesman for Health Minister Leona Aglukkaq said the move would save administrative costs and have no impact on safety.