After months of protest, parliamentary hearings on pension reform begin
Published Wednesday, August 20, 2014 11:50AM EDT
Last Updated Wednesday, August 20, 2014 7:27PM EDT
After months of protest, the main debates regarding pension reform for unionized workers have begun.
Montreal's Denis Coderre and Quebec City's Regis Labeaume, mayors of the province's two largest cities, reaffirmed their support for the government's proposed overhaul of the pension system while unions made clear their categorical rejection of a plan that would see them shoulder more of the financial burden of their pensions.
All this took place as worker demonstrations continued right across the province.
"Don't deviate from your route," Quebec City Mayor Regis Labeaume said on the first of five days worth of hearings, running until next Tuesday.
Labeaume said the pension plan as it stands is "immoral and unsustainable." He warned that if nothing changes, it'll be the taxpayers who will end up footing the bill.
For his part, Montreal Mayor Denis Coderre said restructuring the pension plans has become "inevitable," noting they will account for 12 per cent of the city's budget this year alone.
"It's urgent to act," Coderre said, confident that a deal can be reached and appealing to the "good faith" of unions he says he's ready to work with.
Municipal Affairs Minister Pierre Moreau opened the parliamentary hearings by saying that a looming financial crisis is the reason for Bill 3.
Moreau said no matter who protests, the people of Quebec recognize that if changes are not made, pension funds will collapse.
"It's obvious that free negotiation on this issue was a failure. We have to address that question. This is indisputable, but there's means and ways that could be discussed and that's the reason why we are here today with an open mind to see what could be done," said Moreau.
The provincial government says that municipal pension funds are underfunded by about $5 billion, while unions say the shortfall is less than $3 billion, and point out that many pension funds are fully funded.
PQ critic Alain Therrien said the protests are a direct result of the Liberals having a heavy hand when it comes to negotiations.
"The government closed any possibility of negotiation inside the [bill] and we will see inside the commission we have today is the problem," said Therrien.
Months of protest
Over the past few months unionized municipal workers across Quebec have staged many protests, culminating in the ransacking of Montreal city hall on Monday.
As the hearings began on Wednesday busloads of protesters arrived in front of the National Assembly.
Unionized workers say the changes proposed to pension plans amount to nothing less than the theft of their future, and say it's unfair that they should have to make up the shortfall.
Unionized workers say the changes proposed to pension plans amount to nothing less than the theft of their future.
The draft version of Bill 3 gives municipalities and their employees 18 months to negotiate a way to make up shortfalls in underfunded pension funds, and also come to new agreements about retirement ages and automatic indexation of pension payments.
Once the funds are topped up it would require employers and employees each contribute 50 percent toward future pension benefits.
In most municipalities across Quebec employers contribute more than employees.
The pension deficits are largest in the province's two major cities, which account for much of the municipal workforce.
The draft of the controversial Bill 3 calls for a 50-50 equal sharing of future costs and deficits between municipalities and unionized employees. Negotiations would be fixed at 18 months after which an arbitrator would resolve the issue.
It also proposes freezing the automatic indexation of pensions for about 20,000 workers already retired.
The government claims the collective deficit of the plans fall between $4 billion and $5 billion and suggests the unions and pensioners should be on the hook for some of that amount.
Unions have said municipalities are trying to put them on the hook for deficits they allowed to spiral out of control.
Coderre says the 50-50 split, in line with private employer pension plans, is key. Also, abolishing automatic indexation would provide financial wiggle room for the city.
But two major labour groups that are firmly opposed to the reforms -- the Quebec Federation of Labour and the Confederation of National Trade Unions -- say they are being put on the hook for shortfalls that are not of their making.
The unions have suggested some municipalities are looking to save on labour costs by renegotiating retirement deals. Some 170 pension plans fall under the proposed deal, affecting 122,000 workers and retirees.
The QFL's Serge Cadieux said unions are willing to make some compromises, but wouldn't agree to paying down past debts and balked at the way the government has presented the bill with little room for negotiation.
Cadieux went as far as to describe Bill 3 as "likely unconstitutional" and denounced the "dogmatic stubborness" of the government that wants to impose one rule for all pension plans even though the majority are not in danger.
The CNTU echoed this view, calling on the government to refrain from imposing mandatory sharing of future deficits equally.
Earlier Wednesday, Alban D'Amours, the author of an expert report that helped the government craft Bill 3, testified that "the status quo is not an option."
"There is urgent need for action," D'Amours said, insisting that "the cost of doing nothing will be significant" in terms of tax increases and increasing deficits.
There were also calls from the Opposition for the government to lead by example: provincial politicians as it stands only contribute 21 per cent into their pension plans, a long way from the 50-50 split they're proposing for municipal employees.
Quebec's CAQ Future Coalition party says it intends to introduce a bill that will call for a 50-50 split for provincial politicians as well.
Premier Philippe Couillard told reporters Tuesday that appropriate security measures would be taken at the national assembly after Montreal's City Hall was invaded by demonstrators Monday night.
Protests were held all over the province, including a large one outside the premier's office in Montreal. All took place without incident.
-With a file from The Canadian Press