Stephen Harper’s war on pensions
TheStar.com – News / Canada – The Conservative government doesn’t hate old people. It just thinks they should work until they drop.
May 10 2013. By: Thomas Walkom National Affairs,
Every crisis creates an opportunity. The Liberals used the recession of the ’90s to gut welfare and employment insurance. The Conservatives are using this crisis to take apart pensions.
That is the significance of the federal government’s surprise decision to involve itself directly in the union-management negotiations of 49 crown corporations.
It has singled out Canada Post, Via Rail and the CBC.
Up to now, most attention has focused on the CBC. Critics say Prime Minister Stephen Harper’s Conservatives are trying to intimidate staff of the public broadcaster in order to reap more favourable coverage. And perhaps they are.
But if so, this will be a side benefit for the Conservatives. Their real aim, alluded to cryptically in the last budget, is to take on the public-sector unions over pensions.
What the government doesn’t trumpet so loudly is the fact that a successful assault on the unionized public sector, by crippling what is left of organized labour in Canada, will put more downward pressure on everyone’s wages and benefits.
At one level, the current economic slump is a godsend for the right.
First, as in any slump, high unemployment exerts downward pressure on wages proper.
More important perhaps, the key measure used to fight unemployment — low interest rates — is wreaking havoc with the system of employer-sponsored pension plans developed after World War II.
In this low-return environment, such plans simply can’t earn enough investment income to cover their obligations.
Some private firms have responded by, in effect, eliminating real pensions and replacing them with so-called defined contribution plans — glorified RRSPs.
That in turn means there is now little political support for those in the public sector who still have the prospect of retiring on reasonable pensions.
For a politician who wishes to smash pensions for good, it is a propitious time.
The Harper Conservatives don’t want to take apart pensions because they hate old people. Many Harper Conservatives are old.
But their view of the economy is that nothing should be permitted that might protect those without private means from the need to work — at whatever wage is on offer.
No employment insurance. No welfare. No pensions. No unions.
If those at the top end can save enough to retire comfortably, that’s fine. But in the world view of the Harper Conservatives, those who are not so fortunate should just keep on working, at minimal wages if necessary, until they drop.
This helps to explain why Harper decided to raise the age of those eligible for old age security from 65 to 67. As the parliamentary budget officer pointed out at the time, there was no overwhelming financial reason to cut back old age security But the Conservatives did so anyway.
They just don’t like pensions — at least not for other people.
(Yes it’s true that Senators and MPs, including Conservatives, still enjoy gold-plated pension plans. A Harperite might tell you that this is merely one of those intriguing contradictions that make life interesting).
Most governments make their wishes known to crown corporations simply by limiting their budgets. They then leave it up to the management of these arms-length bodies to work out the details.
But this government wants a guarantee that when cuts are made, the axe will fall where the prime minister intends it to fall — on benefits like pensions.
In the case of Canada Post (which has made a profit in the last four out of five years), the government wants to ensure that workers and their union get whacked regardless of the crown corporation’s business needs.
Canada’s decimated unions represent only 16 per cent of the private sector workforce. If the public sector unions can be neutered as well, Harper’s Conservatives will have made great gains in this war they have chosen to wage.
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