There is a lot of controversy surrounding the Canadian labor market these days.
The most widely reported and discussed topic is the use, or misuse, of the temporary foreign workers program by McDonald’s of Canada.
Although labeled “bullshit” by John Betts, the CEO of McDonalds Canada, in a conference call with his franchisees, the discussion has served a good purpose by raising awareness on employment practices undertaken by some companies in favor of temporary workers versus the local workforce even if they sometimes pay higher wages to the former than the latter.
The key here is the commitment that an employer takes on when a company hires workforce: The social security premiums the employers pay have always been seen as the pain in the neck and hiring temporary labour without their roots in the country is a good way of getting rid of that obligation.
But when it comes to social security, Canada has a much bigger case of injustice, that between the public servants and private sector employees.
The Harper government rolled out some new proposals last week to introduce a third option regarding the pension schemes for private sector, which is basically designed to ensure that the losses should be shared by the employers and employees if the pension funds fail to perform well in the financial markets. It is apparently meant to be a middle-of-the-road option between defined-benefit plans, generally favoured by workers, and defined-contribution plans, which are favoured by employers.
The new alternative, called “the flexible option”, will only be available for Crown corporations and federally-regulated workers that are generally in the transportation, banking and telecommunications sectors.
The target benefit plan also would not apply to the federal public service or to provincially regulated private pension plans.
“We are not picking and choosing for Canadians. We want the defined-benefit plan there as a choice,” Kevin Sorenson, Minister of State for Finance, was quoted as saying in announcing the new scheme.
Isn’t this limiting the choice if this new option is available only for a certain section of the workforce and not for all working population?
Why are government-employed people (at both federal and provincial levels) practically classified and treated as “elite” when it comes to pension schemes?
With all due respect to public servants, one cannot help asking if the labour of an entry level clerk, or a mid-level manager for that matter, in private sector is less valuable than that of the same level public servant?
Because the former is left at the mercy of the market fluctuations and investment brokers who manage the pension funds of the employer while the latter has been guaranteed a steady and secure pension backed by the federal (provincial) budget funded by all taxpayers.
Not that this federal government will really care about it, but rational people should give it some thought to generate ideas to address this “pension apartheid” in this country if we are serious about preventing mounting poverty among seniors.