Mark Janson | CUPE Research
On the one-year anniversary of their election, the Trudeau Liberals introduced a controversial piece of pension legislation, Bill C-27, to the House of Commons. They did this very, very quietly. They didn’t put out a press release, or tweet out a single tweet. Not even a selfie!
When a government acts this quietly, it should set off major alarm bells. Bill C-27 would rewrite federal pension law that applies to federally-regulated workplaces (like Crown corporations, airlines, rail, telecommunications and banks). And it needs to be stopped.
The legislation would open the door for federally-regulated employers to convert secure Defined Benefit (DB) pension plans into insecure Target Benefit (TB) plans, taking away plans that will pay and turning them into plans that may pay.
Even worse, C-27 would permit these changes not only on a go-forward basis, but on a retroactive basis as well. With the consent of plan members, an employer can retroactively convert years or decades of past pension promises into a “target” pension that may – or may not – be paid at the supposedly-promised amount.
Canadian pension law has traditionally treated a Defined Benefit pension promise as a legal obligation of the employer. If the employer promises a pension, they are obligated to pay what they’ve promised. This is not controversial and Canadians unanimously agree with this principle. Bill C-27, however, would turn this on its head. What was once an employer liability is effectively shifted to plan members and even, potentially, to retirees.
This is just wrong. Canada is a country where a deal is a deal.
These workers traded their labour in exchange for wages and a guaranteed pension. Workers held up their end of this deal. But if employers are permitted to walk away from the pension guarantee, they are effectively breaking years of these past deals, and expropriating compensation back from workers and retirees. Of course, workers cannot get their labour back retroactively!
Employers, not surprisingly, support this legislation. It opens the door for them to write off their existing pension liabilities and shifts the collective bargaining goalposts significantly in their favour. This bill is an attack on pension security nationwide. If passed, the bill would set a powerful precedent that provinces may follow.
Before the election, Trudeau made repeated and clear promises that he would not change federal pension laws to re-open pensions. Bill C-27 does exactly that. It is clearly another broken promise from the Trudeau Liberals.
C-27 has only had first reading in the House of Commons, but the government could move it closer to becoming law at any time.
CUPE and our allies have done a lot of work to stop this bill. Let’s keep going. Contact CUPE National’s pension researchers to find out how your local can help stop Bill C-27.
Visit cupe.ca/pensions for more information and to connect.