There really is a pension crisis in Canada, but it’s not the one the Canadian Federation of Independent Business, so called, has promised to tell you all about later today.
Dan Kelly, president and CEO of the Astro-Turf organization that purports to work for the interests of owners small business while in fact working against them, has been sending around Tweets encouraging readers to look for the CFIB’s “report” on public versus private pensions, promising, “it’s a big one!”
Well, we’ll see. But the document certainly won’t address the retirement income security crisis that is faced by tens of thousands of Albertans and Canadians
That could only be addressed by a fair national pension program that would allow all retired Canadians, including CFIB members, to live in dignity and comfort — but that’s the last thing the CFIB wants to happen.
The trouble with that plan from the CFIB’s true perspective is that it would share the risk among us all and wouldn’t benefit the financial services industry the way the current hodgepodge of retirement savings plans does. And you can’t doubt based on its actual activities that it’s giant multi-national corporations — not the thousands of entrepreneurs the CFIB claims are its principal supporters — that the CFIB really exists to serve.
So today’s press release will likely be a rehash of Kelly’s past diatribes against defined-benefit pension plans, especially when they have been paid into by public sector employees, and a demand they be turned into the kind of personal-risk defined-contributions plans that most of us (including the author of this post, it needs to be said) will have to get by on after retirement.
Once you retire, defined-benefit plans pay the same benefits as long as you live. Defined-contribution plans (like mine) pay no benefits but merely give you contributions to invest on your own. The contributions are usually smaller, and they leave retirees vulnerable to the fluctuations of the stock market and hostage by the depredations of the so-called “wealth management” industry. But that’s just fine with Kelly and the CFIB.
Now, I’m not psychic and I haven’t seen an advance copy of the uncritical news stories that Kelly’s press release is certain to generate, so I have to base this prediction on the probabilities. But if the CFIB’s press release today is anything like its past efforts, it won’t be based on sound economic analysis or solid facts, but on an appeal to envy and a false implication that the modest pensions front-line public sector employees contribute to are gold-plated perks the rest of us are paying for.
That’s a “big one,” true, but then, corporate-funded market-fundamentalist AstroTurf groups like the CFIB are best known for their propaganda skills, which are undeniably real, not their peer-reviewed research capabilities.
As Nobel-Prize-winning economist Paul Krugman said in the New York Times and other papers this week: “Modern conservatism has become a sort of cult, very much given to conspiracy theorizing when confronted with inconvenient facts.”
“AstroTurfing,” as alert readers will recall, is an expression that describes organizations that really represent commercial or political special interests while purporting to look out for “grassroots” citizens. This activity is named for a brand of synthetic carpeting that is designed to look, from a distance, like real grass.
So while the CFIB claims to represent 100,000 little guys, small business owners who obviously play a key role in Canada’s economy, the polices it advocates — as it’s “report” is certain to today — are rarely even remotely in the interest of the people who run such enterprises.
It’s true, more than a few small business people do support the CFIB — but it is said here they are the victims of a scam, since they are supporting policies that are clearly not in the interests of either their businesses or their families.
For months now, the CFIB has been constantly complaining about the alleged cost to society of public sector pensions, endlessly repeating dubious claims about the “sustainability” of these plans.
As has been said here before, the CFIB’s issue is not really the sustainability of public service pensions. Rather, based on its advocacy, it is the cost to major corporations of defined benefits pensions, not to mention the confidence this kind of retirement planning can give to ordinary middle-class families.
It’s fair enough for the CFIB to push this agenda, seeing as it’s pretty obvious that the organization in reality exists to benefit businesses that are “too big to fail” when it comes to their own massive taxpayer-financed subsidies and their owners’ endless tax breaks.
But where is the benefit to independent businesses in this?
Consider what happens when the state intervenes in the labour market to “tilt the playing field” in favour of major corporations, as the CFIB relentlessly proposes.
The ultra-wealthy take their money and invest in productive capacity in other countries, spend their recreational time in other countries, send their children to universities in other countries and buy luxury automobiles made in other countries.
Canadians other than BMW salespeople on commission and restaurant servers praying for tips benefit very little, if at all. The savings certainly aren’t spent on research and development in Canada!
Now, think about what happens when defined benefit pension plans and similar arrangements are available to ordinary middle class Canadians. Even though these plans tend to be quite modest, the money they pay bout also tends to stay right here in Canada.
In aggregate, that adds up to a huge benefit for Canadian entrepreneurs.
Moderate-income pensioners, after all, buy local goods and pay for local services, they finance holidays in Canadian locations, they send their children to Canadian universities and technical schools, and they even buy Canadian-made cars in significant numbers.
Who are the principal beneficiaries of all this local financial activity by people with decent pensions (substantially paid for with their own contributions over the years)? Why, local entrepreneurs, of course! The very kind of business people the CFIB purports to represent but, in reality, clearly works against.
This is why, when you look at it closely, the CFIB’s anti-pension campaign has to be based to a significant degree on dishonest manipulation of the facts, the deceptive implication such pensions are much more generous than they in reality are, and encouragement of the destructive force of envy.
The CFIB is not assailing public service pensions because they hurt entrepreneurs — they do the opposite. It is fighting them because of the cost to large employers, the impact on the financial services industry and the choices they give to working people.
This is not the behaviour of the fearless champion of the little guy the CFIB pretends to be.
So if you’re waiting with bated breath for what the CFIB has to say today, just remember that when it comes to conspiracy theories that distort inconvenient truths, identifying them as “a big one” isn’t necessarily a compliment!
This post also appears on David Climenhaga’s blog, Alberta Diary.
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