Business View: Payouts to public sector too costly

Benefits, pensions burdens on taxpayer

Business groups say government pensions and benefits are costing taxpayers dearly.

Nations from Greece to the U.S. are facing unprecedented fiscal challenges largely driven by unsustainable government spending on public-sector wages and benefits that outstrip those in the private sector.

Think Canada is immune? Think again. Our economy is in relatively good shape but we have the same fiscal challenges federally, provincially and locally.

In the federal public service, wages and benefits are about 40 per cent more than they are for equivalent jobs in the private sector. The last federal budget took a tentative step in the right direction by eliminating a provision that federal employees get severance pay for quitting their jobs.

Other benefits are so generous that the phrase, “Come for the maternity leave, stay for the pension” is jokingly used as a recruiting slogan among federal employees. The joke, of course, is on private-sector taxpayers who work longer hours for more years to pay for these generous benefits.

The provincial scene is just as bleak. The B.C. Teachers’ Federation thinks it’s reasonable to demand a year’s pay as a “bonus” for retiring veteran teachers, two sick days a month that can be saved up, and double-digit wage hikes. They are threatening to strike if they don’t get what they want.

The local level of government is also out of control with wages and benefits that outstrip those for equivalent jobs in the private sector by a whopping 35 per cent.

Crazy benefits have been larded into contracts. In Vancouver, employees get a “gratuity day” for each four-month period that they are not away sick.

They can accumulate 120 “gratuity days” and then take them as time off or get paid out when their job ends. Prince George allows employees to get 1.25 sick days for each month worked and employees get paid out 50 per cent of accumulated days on retirement, or 25 per cent on termination.

The mother of all compensation inequities is public-sector pensions. With massive looming retirements and longer life expectancies, it’s becoming clear that in many cases current contributions to public-sector pensions are inadequate to fund future liabilities.

The C.D. Howe Institute estimates that the federal government has a $208-billion unfunded pension liability. It’s hard to estimate how large the unfunded liabilities are at other levels of government as there is no common measurement of liabilities.

Taxpayers will pay for these guarantees one way or another – in higher taxes or as increasing pension payments crowd out spending on valued government programs.

Public-sector unions are in deep denial about the unsustainable nature of the course we are on. Canada will have a day of reckoning unless we insist that governments confront these challenges sooner rather than later.

It’s time to bring public-sector compensation, including pensions, back in line with the private sector for the sake of our country and our children.

~ Canadian Federation of Independent Business

Surrey North Delta Leader

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Surrey Santa Parade may be cancelled

Annual parade in Cloverdale has seen security costs skyrocket

Semiahmoo Peninsula singer joins voices with vocal partner to form virtual choir

Singers share sacred choral piece online as antidote for dark times

‘The exposure is great’: Why this photo is a contest-winner for one Surrey adventurer

Nature photographer Eduardo Baena spends a lot of time in the wild

South Surrey hikers discover decades-old campsite hidden in Golden Ears Park

Group reconnects with original campers through social media, returns log book

B.C. records first at-home death from COVID-19, but 70+ hospital patients have recovered

Total of 970 novel coronavirus cases in B.C., with the majority in the Lower Mainland area

BC Ferries able to restrict travel for sick passengers

Ferries working on schedule shifts to keep workers safe

Pay parking suspended at B.C. hospitals due to COVID-19

Temporary free parking reduces need for keypads, contact

Canada expands 75% wage subsidy to COVID-19 affected businesses of all sizes: Trudeau

Program will provide up to $847 per week for each worker

Helping those at risk, one piece of paper at a time through ‘isolation communication’

Simple paper tool during pandemic making its way across Canada thanks to social media.

‘Back to school, in a virtual way’ for B.C. students in COVID-19 pandemic

Province adds online resources to help parents at home

Canadian COVID-19 round-up: Air Canada cuts 15,000 jobs, 90% of flights

Comprehensive Canadian news update as of 2:30 p.m., Monday, March 30.

Most Read