• New StatsCan data shows 169% increase in cost to taxpayers for bureaucrat pensions

With Labour Day just around the corner, the Canadian Taxpayers Federation (CTF) released new numbers today on “stealth bailouts” for government employee pension plans.

Virtually every government employee pension plan in Canada hit troubled waters over the past decade, but rather than reform the plans or bailout these plans with large cheque presentations, governments have been quietly increasing taxpayer contributions, creating a “stealth bailout.”

According to Statistics Canada data, governments in Canada put $6.7 billion into government employee pension plans back in 2002. By 2012, that expense had skyrocketed to $18.1 billion; a 169 per cent increase. The CTF calculated the cost per employee at $2,676 in 2002 and $5,741 by 2012; an increase of 115 per cent. These calculations do not include special back payments made by governments.

“It’s not fair for everyday Canadians to have to keep bailing out government employee pension plans,” said CTF Federal Director Gregory Thomas. “Politicians should have reformed these expensive and unstable government employee pension plans years ago. It’s time to act.”

In Manitoba, taxpayers have paid for similar pension bailouts. In 2011-12, taxpayers put a combined $137 million into the provincial government’s employee pension plan and the teachers’ pension plan. By 2014-15 that figure is expected to jump to $187 million; a 37 per cent increase in just three years. Other government bodies have had similar pension challenges.

“Government employee pensions are gorging on tax dollars that should have been spent on fixing roads, paying down debt or preventing the PST increase,” said CTF Prairie Director Colin Craig. “It’s time for politicians to take action with government employee plans.”

The CTF has called on politicians to do three things:

1) Lead by example: Convert their own costly defined-benefit pensions into less costly defined-contribution plans.

2) Stop the bleeding: Just as Saskatchewan's NDP government did in the late 1970s, begin putting new employees into less risky defined-contribution plans; this type of plan protects taxpayers from bailouts.

3) Make do like everyone else: Introduce “targeted-benefit” clauses for existing plans. This requires the plans to pay out what they can afford rather than a fixed formula approach.

The CTF has released two YouTube clips to explain these bailouts to the public – click here and here to view them.

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