Backlash over MP pensions
Tories slammed for targeting seniors and workers, but not own retirement
OTTAWA— Prime Minister Stephen Harper’s government is scrambling to limit the political fallout from a budget that targets the pensions of government workers and seniors while not reducing the gold-plated pensions of members of Parliament.
The Conservatives’ budget document notes only that adjustments to MPS’ retirement arrangements will take effect in the next Parliament (likely in 2015 or 2016). But in a single line in his budget speech in the Commons, Flaherty said the government would begin adjusting the cost-sharing burden to make MPS contribute more to their pension plans beginning in 2013.
The Conservatives have been sharply criticized for being vague about changes to MPS’ pensions while asking future seniors to work another two years before accessing Old Age Security payments and requiring federal public servants to pay a larger share of their pension plans.
“MPS missed an opportunity today to put Canada first and lead by example,” said Gregory Thomas, federal director of the Canadian Taxpayers Federation. “MPS can still retire at age 55 after just six years of service. This budget contains no specific changes to the retirement age for MPS, the number of years they need to work, or the massive pensions they can collect.”
Asked about the issue Friday, Flaherty told the media, “The pension contributions of members of Parliament and senators will move in the same direction as that of public servants.”
Currently, MPS contribute a fraction of their pension savings, with taxpayers picking up the rest. But Flaherty said starting next year, MP contributions will gradually rise until they hit 50 per cent of pension savings by 2016. By then, a new Parliament is expected to be in place.
A day after the budget, opposition parties slammed the Conservatives for what the NDP and Liberals said was a betrayal of Canadian voters. Liberal Leader Bob Rae said if there was a need to cut payments to retirees, the Conservatives would have known about it before the 2011election. “On the question of the change in Old Age Security, the simple fact is the government never told the Canadian people that this was in its plans a year ago,” Rae said. NDP MP Robert Chisholm said that “if Canadians had known what the plan was for them if they elected the Conservatives, it would be New Democrats in there forming government.” Flaherty, who is being criticized by those who think he went too far and by those who say he didn’t do enough to cut spending, said the budget is a modest, middle-of-theroad plan. But his budget heeded warnings from economists who said deep spending cuts could make economic conditions worse, Flaherty said. “The world economic recovery is fragile,” he told reporters after a speech in Toronto. “We could have more shocks from Greece and so on, so I think it’s important that we act in a moderate way.” Ontario Premier Dalton Mcguinty agreed the federal budget is “measured.” “Like our budget, it’s taking us in the right direction,” Mcguinty said during a visit to Ottawa to sell his own budget, released on Tuesday. However, Mcguinty said he’d like to see governments do more to encourage retirement savings, noting that as much as one-third of Canadians won’t have enough money to support them in their senior years. With files from Bruce Campion-smith