Quebec municipalities that have been begging the provincial government for measures to help them deal with surging pension-plan costs received an answer to some of their pleas on Thursday.

Quebec Labour Minister Agnès Maltais tabled Bill 79 in the National Assembly, “An Act to provide for the restructuring of … municipal defined benefit plans,” that responds to many of their requests to lessen the cost burdens on municipalities and would force a timetable for negotiations between municipalities and their unions.

The pension plan deficit for Quebec municipalities stands at $5 billion. In Montreal, the city’s contributions to cover pension plan costs have ballooned from $130 million in 2005 to just under $600 million for 2014.

Bill 79 proposals:

That a restructuring of pension benefit plans be imposed if a pension plan has not reached an 85 per cent funding level, or if both sides are willing to discuss it.

If a pension plan offers a subsidy for early retirement before the age of 55, it must be restructured.

Cities and unions must provide for equal cost sharing, meaning a 50-50 split of payments into pension plans. Several municipal unions, including many of Montreal’s, have agreements that see municipalities cover 70 per cent, while unions pay 30 per cent. Provincial plans have a 50-50 split.

Cost sharing of any past deficits can also be included in the negotiating process.

The bill also calls for an enforced negotiating timetable. Negotiations between unions and the municipalities have been known to drag on for years, sometimes proving rancorous and disruptive.

Bill 79 stipulates:

Negotiations must begin July 1 of this year at the latest and aim for an agreement within six months.

If no agreement is found, the minister will appoint an arbitrator to negotiate for a maximum of six months.

If an agreement still cannot be found, the matter will be forwarded to the Commission des relations du travail for it to decide.

Speaking to reporters on Thursday, Montreal Mayor Denis Coderre said he was cautiously optimistic about the bill.

“By tabling (Bill 79), Quebec delivered the merchandise,” Coderre said. “Of course, the devil is in the details, but we have a starting point we can work from. … Pensions are about 12 per cent of the city’s budget and without reform it will only grow exponentially.”

Westmount Mayor Peter Trent, who has been pushing for pension plan reform for years, praised the bill and Quebec City Mayor Régis Labeaume, Coderre and the Union of Quebec Municipalities for pressuring the Quebec government to act.

“It’s a perfect example of how, when you get all the municipal world on the same song sheet, you actually get some results,” he said. “It’s been years we’ve been nattering on about pension plans and this is the first ti me we see something get done.

“On a cursory examination of the bill, it appears this is not just window dressing — they have given some real tools to help municipalities solve the problems.”

Trent had two reservations however. He felt the cutoff age of 55 years to receive pension benefits was too low, given increased lifespans, and suggests increasing it to 60. And he said the 85-per-cent funding level was too low, because there some “sick funds” that are operating at that level.

There is a good chance the bill won’t be examined by the National Assembly because of the launching of a provincial election, but municipal leaders called the tabling of the bill a good start that will open the door to future discussions.

Source: The Montreal Gazette