Every man, woman and child in Canada could be on the hook for more than $9,000 to pay for the unfunded liabilities of public-sector employee pension plans, according to a new Canadian Federation of Independent Business (CFIB) report released today.
Ted Mallett, CFIB's chief economist, said, "The privileged status of public-sector pensions has bred a dangerous complacency on the risks they pose to future pensioners and taxpayers.
"And, since the state of disclosure of public-sector plan financials is alarmingly low, nobody really knows how big the problem might be."
According to the CFIB, based on evidence from Statistics Canada, Public Accounts and other sources, the unfunded shortfall for public pension plans across the country likely exceeds $300 billion.
This shortfall exists even though taxpayers injected an extra $1.27 billion per year into these plans between 2001 and 2010.
The CFIB said allowing pension managers to use overly optimistic rate-of-return assumptions has also contributed to the problem.
The small business advocate concluded money promised to public-sector employees in the form of pensions won't be there without additional massive contributions from taxpayers.
CFIB president Catherine Swift said, "We've known for a long time that the public sector pension scheme is unfair to taxpayers and small business owners."
"This is further evidence that many public-sector pension plans are structurally unbalanced and in need of immediate reform."
The CFIB said the report, Canada's Hidden Unfunded Public Sector Pension Liabilities, is the first in a series that will examine the problem of unfair and unsustainable public-sector pensions.
Last year, CFIB launched the Pension Tension campaign to call for transparency of public-sector pension liabilities and fairness for taxpayers.
