By

Jerry Dias

What do trade negotiations and subsequent agreements mean to employee pensions, wages, jobs and benefits? Plenty, either positive or negative depending on the inclusion or exclusion of items like labour and environmental provisions.
In the absence of such measures trading partners with poor labour and environmental standards have an advantage over countries, like Canada, that have more developed rules and regulations, says Jerry Dias, National President of Unifor. Their inclusion, he continues, helps to level the playing field, benefiting working people at home and abroad.

Dias, the head of Canada’s largest private-sector union, is a part of the Canadian team in the current renegotiations of the North American Free Trade Agreement (NAFTA), advocating for solutions that help workers.

A key player in those talks, he’s on a first-name basis with many political leaders and policymakers. During the course of this interview, conducted while he waited for a flight, he paused to say hello to federal finance minister Bill Morneau who just happened to be passing by.

“Trade should be a progressive agenda. The interesting thing about the NAFTA talks is that this is the first trade deal where they are actually talking about workers issues: elevating standards of living, environmental issues. I give the Canadian team a lot of credit because they are the ones, by far, with the most progressive agenda.”

In October, the union held rallies across Canada to show support for a renewed NAFTA that helps working families and their communities. “Every trade agreement we negotiate must put workers in Canada, Mexico and the U.S. first,” Katha Fortier, Assistant to the National President, said at a rally in Brampton.

It’s all part of a concerted effort to improve the working and livings standards of working people, including the provision of adequate retirement benefits. There are two components to the strategy, says Dias: political action and collective bargaining.

“On the political side, for example, we understand that we really need to strengthen our progressive universal social security system (OAS, GIS, CPP) to make sure that all workers in Canada receive adequate retirement income.” That includes Canadians with disabilities and others who stay home to care for family, under the CPP enhancement, he adds.

Active in the drive to have the eligibility age for the OAS rolled back to 65 from 67, where the previous government had moved it, Dias says the decision to roll it back “was a major step forward as it relates to the whole pension” dialogue.

Another political target is Bill C-27, legislation that would allow the introduction of target benefit plans in federally regulated industries. The concern among union leaders and pension advocates is that employers will attempt to convert current defined benefit plans to target benefit schemes.

Target benefit plans are largely seen to be better than defined contribution schemes when it comes to delivering adequate retirement income, but critics say they don’t deliver the same secure pension promise as DB plans. With a TB plan, a retirement income target is set, but it’s not a guaranteed promise. Rather, the target is conditional on market conditions and the financial status of the plan.

With a DC scheme, retirees are handed a lump sum which they then have to make last through retirement. Efforts are underway to solve the decumulation concerns of DC plans, in part by allowing retirees to leave their funds with their plan, thereby benefiting from ongoing administration and investment expertise – a feature of the DB model.
“Politically, we had one heck of a campaign in Alberta when they introduced Bill 10 back in 2014 … that would enable employers to unilaterally convert DB pensions to TB plans. The bill was withdrawn but that was only after our union and the labour movement really rallied against it.”

The union is also joining others in pushing for federal and provincial action that would protect the retirement income of employees and retirees of companies that go bankrupt, leaving deficits in pension plans that unless covered would reduce retirement income. Pressure is on for the government to revise both the Bankruptcy and Insolvency Act and the Companies’ Creditor Arrangement Act (CCAA) to move retirees to the top of the list when it comes to parceling out a company’s assets to creditors. Pension plans are not secured creditors under the current terms of these acts.

“Absolutely, it’s a huge piece of this. Pensions are deferred wages, no matter how you slice it,” says Dias.
“When you end up with a secured creditor that somehow jumps to the front of the line when they may have been a player for a few years as opposed to an employee who has contributed for 30 years … there’s something wrong with the system. That has to be fixed. The first line of creditors in a bankruptcy should be the pension plan.”

Scott Duvall, an NDP MP, has tabled a bill that would change the act to give retirees more protection, and CARP, the national advocacy group for seniors, has launched an online petition, Put Pensioners First, calling for the same action.

Provincially, retiree advocates are calling for an expansion of the Ontario Pension Benefits Guarantee Fund which provides some pension benefits to members of private sector plans that close, leaving a deficit. Bill Winegard, a member of the Canadian Federation of Pensioners’ board of directors, told ARIA that the fund is a great idea, but needs more resources.

“Ontario is the only province that has such a fund. It is just inadequate … what’s available to be paid out is not enough and the fund does not collect enough money,” says Winegard.
Dias offers that as well as bolstering the Ontario fund, a further solution would be to expand this type of program across the country.

“The bottom line to me is that it’s baffling that you have mortgages, banks accounts, annuities, and they are all insured … but not workers’ pensions, outside the Ontario plan.”

A national program where sector-related companies pool assets to protect retiree income is an idea worth considering, he says.

“We really need some sort of national pension investment pension fund … something that is going to be an alternative to the sudden liquidation of pensions. There have to be ways to protect members’ pensions, such as one fund that would take on the task of administrating insolvent plans and managing those assets. There has to be a way to put something in place that will provide pensions upon retirement, rather than the option of purchasing an annuity immediately after a bankruptcy.”

This type of a national approach of protecting retirement income would also benefit workers displaced by technologies such as self-driving vehicles. Canadians, he continues, have a much better chance at having their interests defended if they a union in their corner.

“We have collective bargaining, we get a kick at the can every three or four years to increase the standard of living. Collective bargaining is the ticket. That’s why a unionized worker has a much greater chance of having a pension and other benefits.”

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