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Uploaded on Oct 21, 2010
The Canadian Federation of Independent Business is calling on New Brunswick's three major cities to address the growing cost of public sector pensions.
The small business lobby group is urging the mayors of Fredericton, Saint John and Moncton to de-index municipal pensions from the inflation rate.
Fredericton city councillors are the latest municipal politicians to confront a massive pension deficit and have been faced with protests from city staff.
'Small business owners don't come knocking at anyone's door to ask to chip in to bring their portfolios back to balance. That's essentially what's been happening with public sector pensions.'— Canadian Federation of Independent Business Councillors backed away last week from the idea of de-indexing municipal pensions despite a $39-million shortfall in its pension plan.
Saint John is also coping with a $129-million deficit in its municipal pension plan.
Andreea Bourgeois, the director of provincial affairs for the CFIB in New Brunswick, endorsed the council's original plan to de-index the pension plan.
The CFIB is calling for the "massive inequity between public sector and private sector pensions" to be ended.
"Right now the city workers, they get two-thirds of the inflation rate their pension would guarantee them that they wouldn't lose money based on the inflation rate. No one else is getting that," Bourgeois said.
"Anyone outside the public sector, that's something unheard of."
Bourgeois and Catherine Swift, the president and chief executive officer of the CFIB, issued an open letter on Tuesday to the city mayors calling for the pension reforms.
Bourgeois said she doesn't think changes will be made right away but hopes the letter will encourage municipalities to consider a change.
The small business organization wrote in its open letter that many small business owners have seen their pension funds hammered in the global economic downturn but they can't rely on taxpayers to bail them out.
"Small business owners don't come knocking at anyone's door to ask to chip in to bring their portfolios back to balance. That's essentially what's been happening with public sector pensions," the open letter said.
"De-indexing would have helped bring this unfair practice to an end."
The CFIB argues that municipal employees are already paid almost 20 per cent more than people working in the private sector, which is the highest differential in Canada.
And when the indexed pensions are taken into consideration, New Brunswick's municipal employees make 40 per cent more than those in the private sector, according to the group.
"As decision-makers in your communities, we urge you to be courageous. New Brunswickers, tired of paying for someone else's retirement, will thank you and will do so by investing in their own nest egg," the letter said.