Ken Georgetti: "Federal government gave misleading information on CPP"

OTTAWA, ONTARIO--(Marketwired - March 27, 2014) - Minister of State for Finance Kevin Sorenson and his department provided misleading information to journalists and the public at a crucial time during the federal-provincial debate in December 2013 over expansion of the Canada and Quebec Pension Plan (CPP/QPP), says Ken Georgetti, president of the Canadian Labour Congress.

"The Finance Department prepared material that was published in a newspaper in Minister Sorenson's name," Georgetti says. "We have access to Information (ATIP) documents indicating that when journalists from other media outlets questioned Sorenson's facts, the department scrambled to provide talking points that did not tell the whole story."

Finance ministers met in Ottawa in December 2013 to discuss enhancements to the CPP/QPP. The Canadian Labour Congress has been advocating since 2009 for CPP improvements which would guarantee income security for Canadians when they retire. Prior to the December meeting, a number of provinces, including Prince Edward Island and Ontario, put forward a workable model providing for increases to future CPP benefits. Those enhanced benefits would be paid for by modest increases to the CPP premiums paid by workers and their employers. These premium increases were to be phased in over a number of years.

Georgetti says that on December 4 Sorensen published an article in the Financial Post which claimed that CPP premium increases would "kill" between 17,000 and 50,000 jobs. The logic was that employers, unhappy with the new premiums, would refuse to hire new workers and would lay off some existing workers. "These claims could only be made by manipulating the facts," Georgetti says.

Georgetti adds, "The material prepared by the Finance Department and peddled by the minister made the assumption that the new CPP premiums would be applied all at once and that no prior notice would be given to employers. In fact, the plan proposed by Prince Edward Island called for a phase in period of several years for the new premiums. This makes all of the difference and the minister and his department knew this all along. Credible experts say that a modest, phased-in increase in CPP premiums would have a nearly negligible impact on employment. And, as even the Finance Department admits, an enhanced CPP would have a positive impact on the economy in the longer term."

When journalists challenged Sorenson's numbers, finance department officials prepared talking points for the minister to defend his position. "We have seen materials obtained through an Access to Information request," Georgetti says. "The Finance Department was saying one thing behind closed doors and another in the information being provided to inquisitive journalists."

The ATIP documents show the department admitting that [quote]: "in the long run, expanding the CPP would bring economic benefits. Higher savings will lead to higher income in the future and higher consumption possibilities for seniors."

The Finance Department also acknowledged that any negative impacts from the increase in CPP premium rates that occurred in the late 1990s were outweighed by the underlying strength of the economy. Georgetti says, "This conclusion was entirely contrary to the alarmist predictions being made by Minister Sorenson in December 2013."

Georgetti adds, "The Finance Department was admitting internally that there was a case to be made for enhancing the CPP, but far as we can see from the Access to information documents, those conclusions were stripped out of the material provided to reporters who had challenged Sorenson's doom and gloom figures."

Georgetti says that this is just one more case of the government misleading the public and the media. Canadians deserve better than this and they also deserve the retirement security which only an improved Canadian Pension Plan can provide. The federal government needs to take our retirement security problems seriously before they become worse."

A copy of the ATIP materials discussed here is available at the following link: http://bit.ly/1ljNtUu

The Canadian Labour Congress, the national voice of the labour movement, represents 3.3 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 130 district labour councils.

Web site: www.canadianlabour.ca

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