A threat to pensioners, current and future has emerged. Ontario Premier Doug Ford has ordered a review of the Ontario Municipal Employees Retirement System (OMERS), to be submitted in September. The question is why?
Ford has an alarming pattern of installing loyalists in government agencies, boards, and tribunals. Claiming “mismanagement,” Ford just took over five school boards and installed loyalists there. Previously, Ford installed loyalists at the Human Rights Tribunal of Ontario, the Landlord and Tenant Board and the Ontario Land Tribunal.
Similarly, Ford has appointed loyalist Robert Poirier to lead the review of OMERS.
Poirier, is a Canadian businessman, and a 2022 recipient of the Order of Ontario, for his work on infrastructure, environmental sustainability and community benefits. David Tsubouchi, a former Harris government Minister of Community and Social Services also sits on the OMERS board of directors. Is his government pension not enough?
The Conservatives also have a pattern of creating or claiming a crisis to justify their actions. With these loyalists in place, it is likely that Ford will get the report he wants, so he can claim mismanagement of OMERS and take control of the OMERS pension plan.
The Globe & Mail and the Toronto Star don’t usually agree on much. Recently economists at Both The Star and the Globe & Mail praised Canada’s public pensions as a success story and the envy of the world.The Star wrote “The Canadian pension model is highly regarded around the world … The people out there (in foreign pension plans) are envious.”
Both The Star and Globe economists outlined very clearly why politicians should keep their hands off and leave public pensions alone. the Teachers Pension Plan, the Healthcare of Ontario Pension Plan (HOOP), and OMERS don’t invest and hope for the best, they own toll roads in Europe, data centers in the US, wind farms, warehouses and private tech. These are the sorts of things that regular investors and governments can’t touch without a few extra zeros in their account.
That spread of assets cushions the blow when there are market corrections.Each of these pension funds have multiple layers of oversight, internal risk teams, external auditors, and member boards that worry over tracking errors and long-term funding ratios. Over the past decade all three plans have met or beaten their required returns to keep the pensions, the deferred wages of their members’ future, safe.
Ford is not the first Conservative Premier to meddle with OMERS
In the life of a pension plan, the late 1990’s is not that long ago.
During the 1990’s when the likes of Conrad Black were raiding private pension plans, Premier Mike Harris ordered a “raid” on the OMER pension plan in the form of a four-year contribution holiday from August 1, 1998, until December 31, 2001.
At the time, critics said it was very shortsighted given the stock market crashes of 1981 and 1991. It was employers who successfully lobbied the government to vote with them for the contribution holiday and it was employers who greatly benefited the most from this decision. At the same time Harris also reduced plan contribution rates for employers.
This Contribution holiday caused much more damage to the plan than the stock market crash of 2008 which caused a deficit in the plan. As critics predicted, no contribution holiday, no deficit.
Ford has a serious annual revenue problem of his own creation, hefty tax cuts on one side and a $7 billion electricity subsidy on the other. Is this why Ford is going after OMERS, so he can access billions for his boondoggle Highway 401 tunnel project?
The facts are that OMERS is very well run with $138.2 billion in assets reported in 2024. Ford’s review is risking spooking plans that are by every measure very well run, very successful and the envy of the world. By meddling in their pension plan Ford is also risking the anger of seniors who are historically the highest voting demographic.
Ford needs to let healthcare and education workers, nurses, police, firefighters and hydro workers focus on their work instead of being worried sick about their future pension.
Given the facts Ford needs to keep his hands off OMERS and take economists advice to leave public pension plans alone.
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