Changes to pension regulations announced in yesterday’s federal budget will put more money into the coffers of the Canadian Press and CBC for operations. The changes will free up around $1 million a year at CP, and accelerate wage increases, and $10 million a year at CBC.
The changes affect how federally-regulated pension plans pay off their solvency deficits. These are technical deficits, based on a test of whether the pension plan could pay all of its obligations if it were to be wound up on a particular day.
“This is great news for all defined benefit pension plans in Canada and overdue,” says Scott Edmonds, vice president of the Canadian Media Guild. “In the case of the Canadian Press, it lifts half the annual financial burden imposed by the solvency test and frees up much needed cash for operations. But it doesn’t mean we can stop looking for ways to improve and stabilize the defined benefit plan, which is the best way to ensure retirement income for workers.”
According to the agreement between the Guild and CP, the 2% wage increase for employees scheduled for December 31 can now be accelerated. The increase will apply starting on the month that the pension relief kicks in. It is not yet clear exactly when that will be. The financial relief also creates more room to maneuver when the union and the company go back to the bargaining table at the end of this year.
The federal budget did not include any new programming money for the CBC but the Corporation will get its annual $60 million top-up for programming, as has been the accepted practice, and will also get additional funding to pay for wage increases negotiated with employees. That means that the $10 million freed up by the pension changes provides the CBC with new options.
“CBC should stop the layoffs and the closure of the TV design department in Toronto announced two weeks ago,” says Lise Lareau, national president of the Canadian Media Guild. “The financial picture is a bit more stable today and we see no reason to go ahead with such a destructive decision.”
To read the Canadian Labour Congress analysis of the federal budget, go to: http://canadianlabour.ca/index.php/budget_analysis/914
For more information, contact the Guild (email@example.com) at 416-591-5333 or 1-800-465-4149.