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BC Politics

FOI Shows BC Businesses Fought Hard against CPP Improvements

Warnings of layoffs, wage freezes used to try to convince province to reject better pensions.

Jeremy Nuttall 13 Mar

Jeremy J. Nuttall is The Tyee’s reader-funded Parliament Hill reporter in Ottawa. Find his previous stories here.

The B.C. government was flooded with business submissions opposing improvements to the Canada Pension Plan changes and even threatening layoffs if the province accepted the federal proposal for change.

The provincial government missed the initial deadline for ratifying the improvements last July 15, saying it needed more time to hear from British Columbians and asking for comments. The province backed the changes in October.

The submissions were released to The Tyee after a freedom of information request. The names of commentators were redacted.

“Small business in B.C. are already struggling with many affordability issues,” wrote one business owner. “If the plan goes ahead it will force me to consider freezing wages, reducing work hours for my staff and could even lead to layoffs.”

Ottawa and the provinces reached improvement in principle to improve benefits and increase employer and employee contributions last June in Vancouver.

The changes will be phased in over seven years starting in 2019, with an initial increase in contributions for an average worker of $6 per month from both employer and employee. Once the process is complete average contributions will increase to $43 a month.

The pension improvements when people making the new contributions retire will equal $7,000 to $20,000 over the current maximum benefit of $13,110.

A January report from the provincial government said many of the submissions appear to have been the result of campaigns from special interest groups for and against the change, repeating the same language.

According to the report, 764 submissions opposed the changes while 1,621 were in support. About half the supporting submissions appeared to use a Canadian Labour Congress template, the report said. Many other messages expressed concern about current retirement benefits and asked the province to support the changes.

But the submissions released to The Tyee show small businesses wrote hundreds of emails and letters to the B.C. government demanding it reject the plan.

Many start the same way, noting the writer was a B.C. resident and small business owner and stating how many people they employ. They then warned they would lay off staff or even close their businesses.

“I will not be able to absorb this increase, we will definitely have to lay a couple of people off if this goes through,” wrote one.

Another said a representative of the Canadian Federation of Independent Business told them the changes were intended to raise money to ease the financial burden for government pension plans.

“If that was the reason, that would be very wrong,” the submission said.

CFIB president Dan Kelly said he stands by the organization’s claim because he believes the increases are meant to help pay for pensions for a coming surge of retirements from the public service.

Kelly said small business is serious when it says it’s concerned about the costs of the plan. Suggestions the extra costs shouldn’t be a burden on any well-run business are not new and don’t change the reality, he added.

“Business owners get lectured that way all the time,” he said. “Ultimately there are only so many dollars in a business and it’s got to come from somewhere.”

He said employers will likely make up the shortfall by cutting staff wages or benefits and employment.

The federal government hasn’t done its homework on how this will affect business and workers in Canada, he said, praising the B.C. government for holding the consultations.

But Irene Lanzinger of the BC Federation of Labour said the “doom, gloom and threats” from the business community come in response to any proposed improvement for workers and don’t materialize.

“We’ve seen this before and really it is a response to almost everything that improves the lives of workers that cost them money, and most things that improve the lives of workers cost them money,” Lanzinger said.

She said the same approach has been taken by business when it comes to raising the minimum wage, for example.

Businesses often say they will be forced to lay off staff, move or close down if changes are made and it “just doesn’t happen,” she said.

For one, she said, businesses aren’t employing people they don’t need. And any costs are recouped over their customer base.

Lanzinger said the improved CPP will help the many workers no longer covered by workplace pension plans. The government is doing business a favour by letting them off the hook for such plans, she said.

The opposition from B.C. businesses is “short-sighted,” she said, and doesn’t consider the needs of society, already dealing with too many seniors living in poverty.

“They want to make profits based on when their workers retire, they’re going to live in poverty?” she said. “I question the morality of that.”  [Tyee]

Read more: BC Politics

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