Good morning, Mr. Chairman. On behalf of CSN's 300,000 members, I am pleased that this consultation is being held and especially to be able to express our point of view on the future of pension plans.
CSN believes it is absolutely necessary to step back a little and do a complete review of our entire pension system in order to conduct an in-depth examination of the types and models of pension plans and, of course, of the scope and level of protection offered to the Canadian public.
To illustrate my remarks, I'll state at the outset three types of problems that merit more serious examination: first, the regression experienced with defined benefit pension plans; second, the small percentage of the Canadian labour force contributing to a registered pension plan; and, third, the legislative barriers to more sectoral or inter-corporate approaches.
In Canada, as in all the provinces, defined benefit pension plans are in trouble, and businesses are terminating them and transforming them into defined contribution plans. The recent financial crisis will no doubt enhance this trend and, unlike a number of provincial acts, the federal act does not require employers to cover the plan's shortfall on termination. In view of the current economic situation, CSN believes it is imperative that the government amend its act and thus prevent businesses from shirking the obligations they have undertaken toward workers.
In Canada, less than 40% of workers contribute to a registered plan, and that percentage is even lower in the case of private sector workers. If we compare our pension system with those of other OECD countries, we realize that a number of countries have systems that result in higher income replacement levels, and do so for many more of their workers than in the Canadian system.
For example, countries such as the Netherlands, Australia and England have passed legislation that is tougher on employers and compels them to contribute to registered pension plans. CSN believes we must look at the Canadian system as a whole and try to find mechanisms that will ensure adequate coverage for all workers at retirement. To that end, we believe we have to find new types of pension plans that help share the risk between employees and employers, not transfer all risks to workers, as is the case with capital accumulation plans in particular.
In addition, we must not only raise the legislative barriers to inter-corporate plans, but also put in place measures that encourage employers to join forces and offer their workers much better pension plans.
I think the Canadian government must take advantage of this consultation to go further. It must assume leadership of a joint reform with all the provinces to reposition the Canadian pension system and, lastly, to enable workers to achieve decent income levels at retirement.
To that end, CSN believes that the Government of Canada should adopt legislation that recognizes the right of all workers to be covered by a pension plan and that requires all employers to pay a minimum contribution. I remind you that these kinds of initiatives were taken by the Canadian government in the late 1980s, which led to an entire series of amendments in the provinces. I think it is about time to take another in-depth look at this matter and to achieve a much more adequate level of coverage, and I don't think that's unrealistic.
I cited some examples of OECD countries. I'll come back to the Netherlands and the recent legislation in England and Australia.
Thank you.