Liberals must not think federal public service is important | Opinion

Rather than let public servants benefit from higher CPP payments like everyone else, the government is reducing the payouts of the Public Service Pension Fund, writes Randall Denley. Photo by TONY CALDWELL /POSTMEDIA

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When it comes to the pensions and pay of Canada’s public servants, taxpayers should expect the federal government to be fair, or at least reasonable. The recent conduct of the Liberal government has fallen well short of those modest standards.

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Let’s start with pensions. Since 2019, the government and its unions have been involved in a pension dispute over so-called over-contributions that has resulted in $2.8 billion being transferred to a federal government holding account.

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This is a problem of the government’s own making. In 2019, the Liberals decided to enhance Canada Pension Plan payments, an act of generosity entirely paid for by the contributions of workers and their employers.

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One would have thought that the goal was to give workers a higher pension income, but when it comes to their own employees, the federal government is taking a different approach.

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Rather than let public servants benefit from higher CPP payments like everyone else, the government is reducing the payouts of the Public Service Pension Fund, leaving government workers with no net gain.

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This might have been a defensible approach back in 2019, when the higher CPP contributions began, but the government dithered, waiting until the 2025 budget to announce that employee contributions to the public service pension plan would be cut by up to $1,100.

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While the government delayed, it and its employees continued to contribute to the federal pension as if the CPP changes had not been made. That’s the source of the over-contribution and it’s not clear what will happen to that money.

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At a minimum, the government should return the employees’ share through a contribution holiday, although it’s interesting to note that the comparable Ontario Public Service Pension Plan did not use higher CPP benefits to reduce worker contributions or benefits.

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In the budget, the Liberal government touts the employees’ reduction in pension payments as good news, but it’s a pay less get less proposal. No doubt the government is more interested in cutting its own pension contribution, which will save $1.1 billion over four years.

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One could argue that public servants are lucky to have a defined benefit pension plan, now a rarity in the Canadian workplace, or that federal pension amounts are adequate without the extra CPP. The government hasn’t been that straightforward, instead relying on clever accounting to limit its pension costs.

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The Liberal government’s strategy in wage negotiations could make one question whether they value their own employees. For example, it has offered the Public Service Alliance of Canada’s members a four-year “deal” that would give two per cent for 2025, then 0.5 per cent for each of the three years that follow.