Canadian Labour Congress

Canadian Labour Congress

October 29, 2008 14:36 ET

A Safety Net for Pensions: New Pension Benefit Insurance Would Be Financed by Taxing the Speculators Who Put Canadians' Retirement Savings at Risk

OTTAWA, ONTARIO--(Marketwire - Oct. 29, 2008) - One week after calling on the federal government to open a dialogue with labour on ways to protect working Canadians from the consequences of the recent meltdown of global financial markets, the Canadian Labour Congress today is calling for the establishment of a national system of pension benefit insurance, funded by a financial transfer tax.

"Canadian pensions and RRSPs have lost almost $100 billion since March 2008," says Ken Georgetti, president of the Canadian Labour Congress. "It's time to get tough on the looters and speculators who are playing with Canadian's retirement security as if it's a game of chess."

Calling for a different approach to the financial crisis, Georgetti says a small financial transfer tax of just one-tenth of a percent would generate billions of dollars in revenue to fund a national system of pension benefits insurance, similar to what exists for bank deposits. The fund would protect the first $60,000 in annual pension and RRSP benefits of individual Canadians from the wild ups and downs of the current markets.

Financial transfer taxes (also know as a Tobin Tax, after the Nobel prize-winning economist) exist in countries around the world.

"We're proposing to take the same approach we have with protecting the environment - the polluters' pay principle - and applying that to the poorly regulated financial sector by making the looters pay for the mess they created and continue to create."

"Already companies are lobbying the government for relief from their pension obligations to workers," says Georgetti. "Taking advantage of a moment when the government is handing out billions of dollars to the banks, their self-interest is evident - most pension plans in 2007 were solvent and well-funded."

"Weakening pension funding rules across the board won't make pensions more secure. We need rules that bring transparency and regulation to the financial industry. But we also need a way to make speculators pay for the damage they cause and to protect Canadians' hard-earned retirement security."

The Canadian Labour Congress, the national voice of the labour movement, represents 3.2 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

Contact Information

  • Canadian Labour Congress
    Jeff Atkinson
    613-526-7425 and 613-863-1413