Bill C-27 is in the news – but what does it actually do?

Bill C-27 is in the news – but what does it actually do?


bill c 27 is in the news but what does it actually doBill C-27 has been front and centre in the media this week, due to the controversy around Liberal Finance Minister Bill Morneau’s personal assets.

But lost in the fray is much information about what this dangerous legislation would actually do.

Bill C-27 would permit federally-regulated employers (like airlines, telecoms, banks, and Crown Corporations) to establish a “Target Benefit” pension plan.

These pension plans are essentially the opposite of secure, “Defined Benefit” pension plans.

  • Defined Benefit: The pension promises an employer makes to a worker become legally-binding obligations of the employer. Since already-earned benefits cannot be reduced, an employer may have to put extra funds into the plan after a market downturn to fully fund the promised benefits.
  • Target Benefit: There is no legally-binding benefit promise made to workers. Instead the plan sets a “target” of what it hopes to deliver with a pre-determined level of contributions. But if there is pressure on the plan during a market downturn, workers’ and retirees’ benefits (either for future or past service) will be cut, rather than the employer having to put more funds into the plan.

In short, workers and retirees bear all of the risks in a “Target Benefit” plan. That’s why CUPE does not believe these plans are an appropriate replacement for “Defined Benefit” plans.

Most importantly, however, C-27 would permit a federally-regulated employer to convert their “Defined Benefit” promises into non-binding “Target Benefit” aspirations even on a retroactive basis.

If this bill passes, workers would suddenly have to defend the pension promises their employers have already made to them, for work they have already done. Workers and retirees held up their end of the bargain, but C-27 would allow employers to retroactively walk away from theirs.

C-27 is offensive legislation that tilts the playing field against everyday working people. Justin Trudeau agreed with this before he was elected, but broke his promise by introducing this bill.

For more detail, see CUPE’s backgrounder here.



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