Liberals sat on report critical of bloated pensions in hydro sector
Kathleen Wynne government’s is being ripped for sitting on report critical of bloated pensions in hydro sector since before the June 12 election.
Premier Kathleen Wynne’s government is being ripped for keeping secret a report critical of bloated, taxpayer-funded pensions in the hydro sector since well before the June 12 election that lifted the Liberals to a majority.
The 45-page study into Ontario Power Generation, Hydro One, the Electrical Safety Authority and Independent Electricity System Operator recommends dramatically lower public contributions to “generous, expensive and inflexible” retirement schemesposing a “significant risk” to electricity prices.
At Hydro One, for example, taxpayers have been contributing an average of $5 for every $1 from employees, far higher than most civil service and private sector pension plans. Two-thirds of Ontarians have no workplace pension plan.
The report is dated March 18 and was posted on the Ministry of Finance website Friday on the eve of the Civic Holiday long weekend.
“This is awfully suspect,” said Progressive Conservative MPP Vic Fedeli, his party’s finance critic, questioning Wynne’s oft-stated goal of running an “open and transparent” government.
“There was ample opportunity to release this document with good public scrutiny. What are they hiding? What didn’t they want us to know?”
NDP pensions critic Jennifer French (Oshawa) said the Liberals “have been sitting in this report for five months.”
Government officials said they had intended to make the report public after Finance Minister Charles Sousa’s May 1 budget — which was rejected by opposition parties, forcing the election — and that posting it without fanfare was an oversight.
The Canadian Federation of Independent Business said the late release of the report is a blow to Wynne’s credibility as she pushes forward with an Ontario Registered Pension Plan (ORPP) for citizens without workplace pensions.
“Why now, why not before the election so people would have known what’s happening?” said Plamen Petkov, whose lobby group opposes the ORPP as too expensive.
“We’re very worried to see government agencies where employees are paying only 20 cents on the dollar for their pensions when taxpayers pay the other 80 cents. No wonder the government itself expects electricity prices to go up 42 per cent over the next five years,” he told the Star.
“It’s really disappointing. We recommend the government clean its own house first before they ask employers to contribute $3.5 billion a year to the Ontario Retirement Pension Plan.”
The report was written by Jim Leech, a former head of the Ontario Teachers’ Pension Plan appointed last December to find ways of making electricity sector pension plans more affordable as the government struggles to eliminate a $12.5 billion deficit by 2018.
“The pensions are generous,” he concluded, noting benefits are “very close” to the maximum allowable under the Income Tax Act, “richer than most of the broader public service plans and employee contributions are also lower.”
For example, the Ontario Power Authority’s pension plan has a 50/50 employer/employee contribution ratio — a level that Leech recommends be reached within five years.
His report provides “advice on a roadmap and potential destination that is both affordable and financially sustainable,” said Beckie Codd-Downey, spokeswoman for Energy Minister Bob Chiarelli.
“The government will be reviewing the report in consultation with union representatives to assess the recommendations.”
Pensions will be subject to collective bargaining between the electricity agencies and their employees.