Public pension fears not soothed by Day

Public sector workers were left worrying about the fate of their pensions after Treasury Board president Stockwell Day stressed Ottawa's commitment to bring the deficit under control Wednesday.

Day met with the heads of the Public Service Alliance of Canada and the Professional Institute of the Public Service. The official purpose of the meeting was to seek "input on public service workforce and workplace issues," Day's office said.

At a press conference on Parliament Hill following the meeting, Day said that deficit reduction will be a focus for the governing Tories once the stimulus spending is unwound during the coming fiscal year.

"Just as Canadians have made significant sacrifices to maintain their own finances they expect their government to do the same," Day said. "Debt reduction is a pathway that we need to be moving along."

Ottawa has stated publicly that it won't raise taxes to balance the books, which suggests the give has to come on the spending side of the ledger.

Finance Minister Jim Flaherty has repeatedly pledged to not cut payments to individuals or transfers to provinces to keep spending under control. That means the fiscal restraint must be focused on Ottawa's other large revenue drain — program expenditures.

Roughly a quarter of Ottawa's direct program expenses go to civil services salaries and benefits, which has led to speculation that salaries and pensions could be on the chopping block.

Ottawa has said little on the subject of public pensions as it prepares to deliver a budget on March 4, a silence that has left public servants fretting about the future as the Conservatives search for ways to reduce a $56-billion deficit.

"Silence sometimes gets our members worried," John Gordon, president of the Public Service Alliance of Canada, told The Canadian Press.

Day spoke of the government's desire to work with public unions to safeguard pensions.

"We want to maintain the integrity of our public sector pension plans," Day said, stopping short of offering a firm assurance that public pension plans are off limits.

Expected to play crucial role

Day, a former Alberta treasurer, was appointed last month to lead the department that makes the rules as employer of Canada's public service and the country's budget office.

He is expected to play a key role in the government's efforts to reduce the deficit to $5.2 billion by 2014-15.

Federal workers contribute to their pensions at a rate of 10.45 per cent of every dollar they make under $47,200 and 8.4 per cent of every dollar above $47,200. Any major changes to public sector pensions would require the minority Tories to introduce legislative changes.

Donald Savoie, an expert on Canadian public policy, said federal public servants shouldn't be worried about their pensions — but they should be realistic.

"It's part of what taxpayers pay for, and it's fair ball," said Savoie, Canada research chair in public administration and governance at the University of Moncton.

"It's somewhat irresponsible for people to say, 'Don't look at my spending, look at somebody else's spending.'"

In October, Flaherty unveiled proposals to tinker with pensions at Crown corporations. Among the proposed reforms was a ban on employer contribution holidays unless the pension plan has a five per cent cushion between its assets and liabilities.

Also, plans will be allowed to carry greater surpluses than before, and employers will be required to fully fund pension benefits when a plan is terminated.