Immunity clause raises questions about pension bill

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Legislation that protects government from future legal action goes too far

Finance Minister Wes Sheridan

The controversial public pension reforms being pushed forward unilaterally by the provincial government are starting to spin out of control. Last week, the province tabled legislation that will enshrine into law its plans to reform public sector pensions, announced a month earlier by Finance Minister Wes Sheridan.

But it contains a surprise clause not previously announced that protects government from liability for any changes in the act, including changes that affect benefits, contributions and funding. The government is making itself immune from any future action — legal or legislative. It is also setting itself up to charges of being dictators and bullies.

But instead of scaring off the unions, the latest action seems to have stiffened their resolve. Unions that were intent on fighting the reforms through pressure and lobbying now seem to think they have solid legal grounds because of this immunity from liability clause. When it looks like government is taking away rights, it become a Charter of Rights and Freedoms issue under the Constitution Act of 1982.

Unions accuse government of trying to balance the budget for the next provincial election on the backs of their civil service employees. The Union of Public Sector Employees has filed a grievance over the changes, arguing the changes violate the union’s collective agreement with the province.

Premier Robert Ghiz is defending the new clause, saying it protects not only taxpayers, but also the pension fund and plan members. He argues the province’s main concern is about protecting the fund, its ability to pay out pensioners and protect the members from any legal action in the future.

This is obviously a situation the province had hoped to avoid. After lengthy negotiations over the past year or more failed to get union support, the province announced this fall it would push forward alone. Mr. Sheridan argued the pension plan is seriously under-funded, even with major government support, and changes are needed immediately to save it. The end result would see secure but lower pensions than bargained by unions over the years.

Unions argue the province is breaking contracts again and the optics looked dangerously like the infamous 7.5 per cent wage rollback of public sector unions in the mid-1990s. Members of the general public, many without any pensions, are on the sidelines wondering what to believe and whom to support.

Unions agree pension reform is necessary, but they argue the province is going too far and too fast. Unions proposed a compromise solution to share joint risk and ownership of the pension plan. It seemed like a sensible compromise but Mr. Sheridan is reluctant to take that leap. He is fearful that should the fund get into financial trouble, plan members could become big losers.

The government is embarking into uncharted waters with this retroactive legislation and one wonders if it hasn’t overstepped its legislative and legal bounds? The immunity clause is almost unheard of. Shouldn’t the courts be the final arbiters on the constitutionality of laws, not government themselves?

It would be ironic if the government becomes the architect of the pension reform bill’s demise by inserting an immunity clause that may be declared unconstitutional.

The province acts like it has all the answers and knows best for all concerned. And government looks condescending when it insists it’s acting to save unions from their own folly. But isn’t government trying to legislate rights away from Islanders they were elected to represent?

The latest legislation is troubling, making it appear that the government is infallible. Someone in Rome might take offence.

Organizations: Union of Public Sector Employees

Geographic location: Rome

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