Sacrifice and the public sector
Re: How about some public sector sacrifice, too? Jack M. Mintz, May 13; and Are there any limits on spending, Joe Oliver, May 7
Jack Mintz hits our current circumstances right on. Just the $14,000 difference in the average annual wages of the public sector and the private sector is telling. And the fact that 96 per cent of current job losses are happening in the private sector is quite an eye-opener.
Our political leaders on all three levels of government should stand up and show their solidarity with a majority of Canadians by trimming wages in the public sector ( healthcare workers excepted) to help ease the financial mess we are headed into. Brian Davidson, Pincourt, Que.
I don’t doubt that Jack Mintz is a brilliant economist, but he needs to get his glasses checked. In his May 13 piece, he argues that the public sector is about to face pressure on wages and benefits. It will. He also argues that our public service could be more productive and that it should compensate top performers. It should. But his idea that public-sector workers aren’t making sacrifices (at least in Alberta) is wilfully ignorant of what’s actually happening.
The University of Calgary (where Dr. Mintz is the president’s fellow at the university’s School of Public Policy) cut 250 jobs last fall. Like other post- secondaries across the province, it is poised to eliminate many more. The Alberta government, which just appointed him chair of its Economic Recovery Council, is planning to cut 2,100 public-sector jobs. That’s on top of tens of thousands of temporary public sector layoffs because of the COVID-19 pandemic. Then there’s the stress and strain on those still working on the front lines of essential services.
Yet, in his opinion piece, Dr. Mintz never acknowledges what’s happening to the public-sector workers immediately around him.
I hope this doesn’t affect his work on Economic Recovery Council. Over 100,000 people in Alberta’s resource sector have lost their jobs and we need to help them. But all Albertans deserve to benefit from the council’s work, not just those in Dr. Mintz’s preferred line of sight.
I have a suggestion to free up significant funds to direct towards the COVID debt.
Immediately convert all public service and Crown corporation defined-benefit pension plans to the industry standard defined-contribution pension plan.
Firstly, it would reduce the approximately 10 per cent to 12 per cent of salary that taxpayers contribute to the defined- benefit pension plans compared with the industry standard of 5.0 per cent of salary for a defined-contribution pension. Based upon a 2019 federal budget of $ 355 billion with salaries accounting for approximately 50 per cent of program spending a 5.0 per cent reduction in matching pension contributions would result in approximately $17.75 billion in annual savings. The COVID-19 debt could be eliminated within one generation.
Secondly, it would reduce the estimated 20 per cent pay and benefits premium that public service employees enjoy over the equivalent employees in the private sector.
Thirdly, it would eliminated the “open- ended” nature of our liability to fund public service pensions. A defined-contribution plan limits our liability to the 5.0 of annual salary contribution. It moves the responsibility of retirement funding to individual employees to plan and provide for their future retirement like the majority of Canadians.