Chapter 1
The Elephant in the Room
The whole idea of the pension was to provide public servants with a decent retirement when they left public service. It was not to enrich them or to make them wealthy, to allow them to retire younger, with more money, to go off and play golf while the rest of us supported them. This attitude is growing out there in the public. People are beginning to realize what has been done and they are not happy about it.
Jack Dean, PensionTsunami.com
If you happen to be one of the lucky 20 per cent of Canadians who is a government employee, we have to say congratulations. Your employee unions have consistently negotiated phenomenally lucrative contracts on your behalf over the past 30 years—while complaining bitterly that it's never enough. It used to be that government service workers such as librarians, garbage collectors, municipal office staff, and even politicians were paid less than private industry employees doing similar tasks. Partly this was because government workers had better job security, and never had to worry about their employer going out of business or being unable to meet payroll. Partly it was the concept of being a “good citizen,” and that the joy of working on behalf of everyone else had some intrinsic value to it. Choosing a career as a teacher, nurse, or police officer had intangible rewards of increased respect and prestige, which offset lower income levels. All that, however, has changed.
It may have started at the politicians' level. If you have been paying attention during the past 30 years, you'll remember a move to raise the salaries of politicians, supposedly in order to attract a higher calibre of person to public office. The theory was that our elected politicians came from an income class populated by people with low moral and educational standards, who were prone to corruption, bribes and influence peddling, and poor decision making. The idea was that the type of people we needed to run our country were highly sought after by business and had the opportunity to make more money there, and that we therefore needed to match incomes with business or at least offer an attractive benefits package to encourage such people to commit to public service.
We will leave it to you to decide if our current crop of politicians demonstrates a higher ethical and moral standard than previous generations. Or if they are better able to make decisions on our behalf. Read on and judge for yourself. The point is that politicians, who actually vote on their own salary increases (can you say “conflict of interest”?), were encouraged to raise their own salaries and the benefits that went with them. The best benefit they could give themselves was a fantastic pension plan that rewarded them with a lifetime of income for what often turned out to be a very short period of actual work.
The 2011 federal election demonstrates this plan in action. The 113 defeated and/or retiring members of parliament (MPs) will collectively receive $4.9 million1 in pensions their first year under a plan—for all MPs—that will eventually cost taxpayers $1.1 billion, based on a life expectancy of 85 years. Seventeen former MPs qualify for more than $100,000 per year, including former Bloc Québécois leader Gilles Duceppe, who receives $141,000 annually for his years of effort in trying to break up the country. Vive le Québec libre! As an elected representative paid by taxpaying Canadians, Duceppe would have received his pension—from those same Canadians—even if he had succeeded in his attempts at secession and become the prime minister of an independent Québec!
MP pensions are paid starting at age 55, so those retiring closest to that age receive pensions for the longest period. Five MPs will receive more than $3 million each thanks to their early retirement age.2 Even those MPs who did not serve the minimum six years to qualify for a pension will receive a severance payment equal to 50 per cent of their annual salary. For deposed Liberal leader Michael Ignatieff, this severance was $116,000.3
The biggest loser in this scenario was Labrador MP Todd Russell, defeated after serving five years and 11 months—one month short of pension eligibility. The Canadian Taxpayers Federation estimates4 that this will save taxpayers $600,000—unless Russell wins again in the next election. He certainly has incentive.
Once the trend of awarding themselves pay raises, great pensions, benefits, and severance was established, it became increasingly difficult for politicians to turn down the ever-increasing salary and pension requests of all the government workers in their domain. And whenever a ruling political party tried to limit these increases, employees threatened massive strikes and disruption of public services. In many cases these strikes became reality, and in every case, politicians eventually backed down.
If the government spends more than it collects in a year, the shortfall is called an operating deficit, or simply the deficit. The deficit is the cost of providing a year's worth of services to Canadians, minus revenue taken in that year from taxes. Services such as health care, education, and road work that most Canadians say are insufficient anyway.
The debt on the other hand, is the accumulation of yearly deficits. Most people are confused about these two terms, largely because the media and politicians focus on the deficit—which is current news—and ignore the debt. Part of any yearly deficit includes interest payments on the debt. However there is an elephant in the room that promises to be much more damaging to your future than simply the yearly deficit, interest payments, and accumulated debt that will need to be repaid, hopefully before you die. This elephant is federal, provincial, and municipal government pension obligations, and is more damaging because this cost provides no real value to the taxpayer. In fact, whenever a public sector employee retires, two costs are incurred—the retiree's pension, plus the cost of the worker hired to replace him. With life expectancy now at 85 and the average retirement age of our public sector at 59 and dropping, pension costs will become astronomical. As you can see in the example of our retiring politicians, paying for just 113 of them incurs a bill of $1.1 billion. What will be the final cost when our 3,500,000-plus current public sector workers (federal, provincial and municipal) are retired?
Let's set aside the rhetoric for a minute and look at the amount of your money already siphoned off to fund these ever-increasing employment and pension benefits, and how their associated costs have been accumulating. Our federal government has approximately 420,0005 employees with a basic pension plan that guarantees them up to 70 per cent of their final five years' average income for life and/or the life of their spouse if their spouse outlives them. What this guarantee means is that if their Canada Pension Plan income is less than 70 per cent of their last five years' average annual working income (which is virtually guaranteed, given their high incomes), and their employee pension plan is underfunded and can't pay this amount (most of them are), the government will top this up with additional funds from taxes—and these pension commitments legally come before all other government expenditures. In fact, in 2009 the C.D. Howe Institute, a leading Canadian think tank started in 1958 to “research and promote educational issues related to public economic policy,” calculated that the pension plan for federal employees alone is short about $200 billion.6 This is impossible to pay under our current system. The entire yearly revenue for the federal government in 2010 was only $231 billion—and the government spent $280 billion without touching this pension shortfall.
Nowhere is this shortage more apparent than in the federal politicians' own pension fund. According to the pension fund's annual report to Parliament for 2008–09 7 the fund for members of Parliament rose by 10 per cent during the 2008/09 global recession. How did they achieve this miracle of growth in an economy in which private pension plans lost 21 per cent of their value, and even the staid Canada Pension Plan (CPP) lost 14 per cent? Easy—there is no actual money in the fund, it's simply a guarantee that politicians will receive a specific pension. This guarantee currently sits at more than $500 million and has an interest set by regulation and guaranteed by taxpayers. So while your RRSP may be at risk from market fluctuations, you can be comforted by the fact that your elected representatives have no risk—just like your other 420,000 employees. “Not a dollar of real cash has gone into these (politicians') plans,” said Bill Robson, president of the C.D. Howe Institute, a conservative think tank, “so when the time comes to pay the pensions, all of this money is going to have to be raised either by real borrowing—like actually floating bonds that people pay cash to invest in—or through taxes.”
Canadian Taxpayers Federation federal director Kevin Gaudet said he doubts many Canadians are aware that “not only do they not have enough of their own money saved, but they're also paying through the nose in their taxes so that they can feather the retirement beds of public sector employees and politicians. I think they ought to be mad. It's a huge discrepancy.”
The taxpayer's federation calculates that after serving only six years, an MP is entitled to an annual pension of $27,000. Long-serving MPs can collect more than $100,000 a year. Having just completed his fourth year as prime minister (2011), Stephen Harper is now eligible to collect a special retirement allowance once he turns 65—on top of his MP's pension, which he can begin collecting at 55. By Gaudet's calculation, that means Harper will eventually collect an annual pension and allowance worth at least $178,000.
If you are a government worker, this apparently just looks like a fair deal. After all, Canada's moral standard for taking care of its seniors is that we respect their contribution to our country and want them to be comfortable in their old age. We already have a health care system that provides more benefits to seniors than any other age group. Again, going back 30 years or so, the general idea was that people working for big business, such as the automobile industry, the steel industry, and other manufacturers that built our country, had strong unions which had negotiated better wages, benefits, and pensions for their workers. Better, that is, than the compensation packages offered to public sector workers. Public service unionized employees were simply trying to keep pace. However something completely unforeseen has taken place and the pendulum has swung in the other direction. Private industry in Canada has been decimated by global forces, resulting in massive layoffs, plant closures, and entire industries being moved to foreign countries—resulting in a significant erosion in incomes and benefits. Private company pensions in particular have been hard hit, in part because government regulations that were meant to ensure future pension payments were lenient at best, and non-existent at worst.
Pensions. Pension debate. Pension reform. The mere words put most of us to sleep and yet at some point in your life, the quality of your pension will become the very foundation of the quality of your life. It has been said that the only two things you can count on in life are death and taxes, but in Canada it may be more accurate to say death, taxes, and pensions, because virtually everyone in Canada is guaranteed some form of pension income once they reach a certain age or become disabled and cannot work.
“Okay, okay,” we can hear you saying. “I get that pensions are important, but what do government employee pensions have to do with me?” Well, it turns out that most of the money that politicians have borrowed in your name over the past 30 years has accumulated in pension plans8 for a select group of people—your employees. Don't think you have employees? Think again. In a government “of the people, for the people, by the people” as democracy is often described, all government employees are actually employees of the people. That would be you. The same can be said of your elected officials, who secure their jobs by way of winning more votes than the other “job applicants” who run in elections.
It's very easy for individuals to completely lose their connection with our democratic system, our elected officials, and our government employees when they become disconnected from the reality of where the money comes from to fund all of these jobs and the programs they are associated with. We'll deal with this in detail in Chapter 8, but we think it's important that you understand that you are the employer of all of these people since you actually pay their salaries, benefits, and most importantly—their pensions.
So now that you understand that you are the employer in this circumstance and that all the money for the system comes out of your pocket by way of taxes, let's consider the suggestion that most of the money that has been borrowed in your name by our various levels of government has been funneled into pensions for your employees. Keep in mind that this borrowing is an ongoing process with no end in sight unless we see some very dramatic changes in the way government business is conducted.
Figure 1.1 Total Retirement Assets of Canadians (1990-2007)
So here are the numbers. Canada's total provincial and gross federal debt is somewhere in the range of $1.27 trillion,9 and increasing daily. The total current assets of all government employee pension funds is in the range of $800 billion. If you can take a step away from the rhetoric of who contributed how much to what, it's pretty easy to connect those two dots and conclude that a large part of our debt has been created by governments borrowing money to fund the pensions of public sector workers.
Few Californians in the private sector have $1 million in savings, but that's effectively the retirement account they guarantee to public employees who opt to retire at age 55 and are entitled to monthly, inflation-protected checks of $3,000 for the rest of their lives . . . legislators don't want a government of the people, by the people, and for the people, but a government of the employees, by the employees, and for the employees.
Arnold Schwarzenegger, (Governor of California), “Public Pensions and Our Fiscal Future.” Wall Street Journal, August 27, 2010.
This $800 million has already been transferred from your pocket to theirs, but your total debt obligation doesn't stop with the money that's already been transferred. Because public sector pension payouts are guaranteed by taxpayers, you have, in effect, signed promissory notes—by proxy of course, since you weren't directly consulted on any of these decisions—that commit you to hundreds of billions of dollars in future payments. That's right: most of these pension funds are “underfunded.” This means that the $800 million that the funds already have in their coffers is far short of being enough money to pay the pensions that politicians have agreed to on your behalf. And by “far short,” we mean that these lucrative public sector pension plans are currently estimated by us to be underfunded in excess of $300 billion dollars. The pension guarantees are based on unrealistic expectations of strong economic growth and consistently high investment returns for years to come—windfalls we haven't seen in Canada for the past 10 years. We expect the shortfall will be much larger than this. The actual cost will be guaranteed by you the taxpayer, regardless of investment return. So even if the markets remain stagnant, as they have for the past 10 years, you will pay the full pension amount to your retired employees.
It's not uncommon for average taxpayers to become incensed when they realize that for the past 30 years,10 as they have struggled to support their families in the face of an ever-increasing tax burden, the taxes they pay have been siphoned off to provide ever-increasing salaries and benefits for public sector employees and politicians. Supporting these pacts has already cost us $1.2 trillion in government debt. Every man, woman, and child in Canada now owes $35,000 worth of this government debt,11 and we must pay it back, with interest! Add in the $300 billion pension funding liability, and the many other “hidden” debts at the municipal level, in the form of other post-employment benefits (OPEBs) (which we will talk about later), and you can see why pundits refer to a “pension tsunami.”
The Wage Gap—Skyrocketing Compensation Packages
So, public sector employees have better pension plans than most Canadians, but do public service workers really make more money than private sector employees? This has been a recent debate as unions defend their territory. Let's look at the studies. The Canadian Federation of Independent Business put together a comprehensive analysis called Wage Watch,12 which highlights the gap in wages between private sector workers and the civil service. The report, released in 2008, concludes the following:
Detailed analysis of 2006 census findings on full-time earnings by sector and occupation shows that government and public sector employees are paid roughly 8–17 per cent more than similarly employed individuals in the private sector. In addition, taking into account significantly higher paid benefits and shorter workweeks, the public sector total compensation advantage balloons past 30 per cent. Expressed in dollar terms, public sector employers have a combined wage and benefits bill that is $19 billion higher annually than if they had kept costs to private sector norms.
This $19 billion includes wages, benefits, and pensions. Another report recently released by the Frontier Centre for Public Policy, a Winnipeg-based think tank updated the annual cost of just the wages paid to the public sector as $2.6 billion per year more than equivalent private sector wages.13 This $16.4 billion difference shows the true cost of the “add-on benefits” that the public sector has negotiated for itself at taxpayer expense. Most Canadians are not aware of the existence or cost of these benefits because they are not reported as part of wage settlements or given a dollar value in media reports. Add-ons include contributions made by the government to employee pension plans and various benefits programs including dental, health, life insurance, and sick pay. The public hears about a 3 per cent wage increase for instance, but not about the corresponding cost of benefits or the future cost of higher pension guarantees based on the higher wages.
Beyond simple wages, there is a multiplier effect on pensions for every dollar wage increase given to an employee. As wages go up so too do other post-employee benefits (OPEB) costs, such as health insurance, dental insurance, life insurance, sick pay, holiday pay, and unfunded pension liabilities, which are based on retirement salary. These associated costs have become a huge and unrecognized burden hidden in the back pages of the financial statements of your local hospital, school board, municipality or university.
While many public sector employees retire early their contracts entitle them to continue to receive paid health care benefits until age 65. Taxpayers pick up this employee benefits tab for early retired workers. These costs are reported as future employee benefit liabilities or debts; in effect, this is like a loan to early retirees that is paid back by all taxpayers through future taxes. Health care rates are rising by 8–10 per cent a year and these costs add up. For every dollar of wage increase, the pension fund requires $16 in contributions to cover associated retirement benefits. So a reported $1,500 wage increase for an employee means that the pension plan will need an additional $24,000 by the time the employee retires. Of course the employee will never contribute that much, so the government reports it as an OPEB or future employee benefit liability.
At the City of Toronto in 2009, for example, OPEBs were $2.6 billion.14 Ontario's Hydro One15 had $980 million of OPEB liability on its books, as do many other government entities. You can guess what this will do to your tax rates and your Hydro bill.
At the other end of the equation, benefits paid out continue to outpace contributions paid into these public sector pension funds. This discrepancy will eventually be made up by taxpayers and is added to the pension deficit or shortfall. Demographic and investment trends indicate that this gap will widen every year for the next 20 years as baby boomers retire and live longer than any previous generation, and stock markets suffer from continual RRSP withdrawals. Currently, Ontario Teachers' Pension Plan (OTPP) annual benefit payments exceed $4 billion while annual contributions are only $2.2 billion. This trend will continue and accelerate in the future.
The report by the Frontier Centre for Public Policy we mentioned earlier found that:
- Federal government public administration workers saw their average wage increase by 59 per cent between 1998 and 2009. This is almost twice the rate of wage growth in the economy as a whole, which grew at approximately 30 per cent. Provincial administration came in second at 55 per cent, and municipal increases were close to the national average at 33 per cent.
- No other major industry tracked by Statistics Canada experienced wage growth that was close to that seen in the public administration category. The next highest rates were in the real estate, mining, and oil extraction industries at 46 per cent. Others included waste management at 35 per cent, construction at 34 per cent, finance, insurance, and business management at 33 per cent, and food services at 31 per cent.
- At the bottom of the list were manufacturing at 19 per cent, retail at 17 per cent, and forestry at 11 per cent.
- Rapid public administration wage growth has caused the pay gap between the average public servant and the average worker in the economy to widen considerably. In 1998, the average annual wage for federal public administration workers was approximately $10,000 higher than the average worker in the economy. By 2009, that gap had grown to $25,000.16
Figure 1.2 Provincial Government “Pay Premium” (2008)
It's interesting that we have a constant focus on wage disparity by gender, age, and ethnicity, but any focus on “sector discrimination” between public and private sector workers is attacked as unfair by public sector unions.
Let's go back to our discussion of fair wages and pension funding. If the government pays a building inspector $5,000 a year more than you can afford (meaning that the government borrows the money and adds it to the yearly deficit and accumulated debt), and that inspector puts this $5,000 into his union-managed pension fund and that $5,000 is matched by his employer (the taxpayer again), we can say that his pension fund has been totally funded by taxpayers. Of the $1.05 trillion in private and public trusteed pension funds (not including private RRSP funds), $800 billion has been funded by taxpayers on behalf of public sector employees in this way.17 The remaining is in private sector employee pension plans.
It's funny to hear people comparing government jobs to private sector positions and claiming these jobs are in some way the same. In private business the perpetrators of this pension Ponzi scheme would have been behind bars years ago. In government we re-elect them, overpay them, give them tenure and huge payouts if they get caught being incompetent or unethical and have to step down before their terms expire; or great pensions if they can outlast the chase. Does this sound fair to you?
Staff costs—including salaries, benefits, and pensions (all known as compensation costs)—are the biggest costs of government. These range from a low of 45–50 per cent at the municipal level to as high as 80–90 per cent for police and education budgets. Here are some recent examples:
The question of fairness comes down to who is paying the bill. If the private sector can run a profitable business and reward its employees with higher salaries, more benefits, shorter careers, and higher pensions, more power to it. Our governments will then also receive higher income by way of income tax on workers' salaries, taxes on corporate profits, and so on, as part of the redistribution of wealth. But if our governments are borrowing money every year—money that taxpayers will have to pay back—in order to provide the best salaries, benefits, and pensions for public sector employees, is this defensible? We think not.
But wait, it gets even better. The next step in the master plan to create a better life for Canadians (which we believe is the purpose of government, is it not?) was to systematically reduce the workload on government employees. This began by shortening the work week for government employees, now typically 35 hours per week, down from an average of 40 hours a week 30 years ago. Next we saw an increase in vacation time, to up to eight weeks a year for senior employees. And lastly, just to be done with the whole bother of working altogether, we saw a reduction of years on the job necessary for workers to earn their pensions. Before we go into that, however, a word on the “age of retirement.”
If you ask Canadians what the age of retirement is, or if you look on any global information site that compares Canada to other countries, you will find that the age of retirement in Canada is referenced to eligibility for the Canada Pension Plan (CPP) or the equivalent Québec Pension Plan (QPP) which replaces the CPP in Québec. This age is currently 65. “Early retirement” is an option at age 60, with reduced CPP benefits, and no Old Age Security (OAS) or Guaranteed Income Supplement (GIS), two additional federally-funded pensions that are not available until age 65. The CPP is the government-managed plan for all working Canadians into which employers and employees have been paying since 1966. If you have paid into the CPP, you are entitled to receive full benefits—based on your employment contributions—at 65 or a reduced monthly payment at age 60. This typically means working 40 years or more, and is often referred to as the “40-year plan.”
Public sector employees, however—the ones whose salaries you pay—have been able to whittle that down to just 35 years, and in the case of some specific jobs, such as those in the police force, fire department, or military, just 30 years of service are required before employees can retire. In fact, the average retirement age in the public sector is now 5918 with many thousands of civil servants retiring closer to 50. Of course, they don't receive those pensions until they're 65, right? Wrong. While the rest of Canada's taxpayers must wait until at least age 60 to receive a reduced pension from CPP/QPP, and age 65 for a full pension, government employees begin receiving CPP immediately upon retirement. This CPP equivalent is known as a bridge benefit because it “bridges” the time from early retirement until age 65. This benefit is topped up from the employee pension fund to make the full pension amount. The bridge benefit stops when the employee becomes entitled to CPP/QPP benefits.19 This effectively gives the public servant CPP from the first day of retirement.
Seems that the public sector took to heart insurance company London Life's concept of “Freedom 55” as an achievable goal for themselves. Most Canadians will never achieve this level of financial freedom at any age.
Having reached only the age of 50–59, public servants don't have to retire. They can continue to work at those same positions until they reach 65, and many do, “retiring” one day and then returning to work shortly thereafter. Sometimes they return to the same job but usually another government job, because of the connections they have within the system. The only difference is that they are now collecting both the pension and a regular paycheque. This is known as “double dipping.” Plus, these workers begin building a second pension. If they are able to work another 15 years in their new job, they will qualify for almost half the value of a full second pension (equal to 30 per cent of income), which can put them up to 100 per cent of their previous working income in total.20 So few of these people actually retire the first time—what they are really doing is retiring from that particular job. Many of them get another job in the public sector. Retire twice and get two pensions? Sign us up for that!
Double Dipping
In Newfoundland the provincial auditor discovered that during 2010 a group of 443 retired teachers earned $15.6 million in pensions and $5.2 million in wages.
CBC News, January 26, 2011
We often read reports of top civil servants, such as police chiefs,21 fire chiefs, government department heads, and others in senior public sector positions, retiring in their early 50s and listing “personal reasons” as their motivation for leaving highly-rewarding jobs. None of them ever seem to say, “I qualify for 70 per cent of my income as pension now, so it makes no sense to continue working.” Strangely though, these personal reasons always seem to crop up at the 30- or 35-year mark, just as their pensions become available. The public statements of retiring senior civil servants are carefully crafted to avoid any hint of the financial bonanza that awaits them, so the public never learns the truth. Perhaps if every 50-something public sector retiree said, “I'm retiring because I have a full pension now, and I'm going to spend the rest of my life playing golf while you pay me,” or “I can get 70 per cent of my salary for doing nothing, so I'm going to take that, and then go out and get another job working for the government and get 100 per cent of that, plus build a second pension for when I really retire,” the taxpaying public would know where its tax dollars are actually going.
So there you have it. The people you chose to govern on your behalf have systematically borrowed and/or obligated you to the tune of an estimated $1.2 trillion to make sure that your employees have the best of all possible worlds.
The fundamental purpose of our government is to provide common services to protect and enhance the lives of all Canadians. Essential services such as defence, police, and capital projects in the domain of public works have long been provided through government taxation. Provision of nonessential services—ones that could be provided privately or by volunteers, such as fire fighting, health care, education, libraries, culture and sports, garbage collection, and maintenance of public works—is a sign of a modern, more controlling government, and Canadians have come to expect these types of services to be provided by the government. Many political commentators refer to this level of government intervention in our daily lives as living in a nanny state.
These services have been funded by Canada's progressive tax model, under which income tax rates increase along with a person's taxable income. The intent is to have those who can afford to pay more provide a larger contribution to the public good. A balancing act is required to provide services, while at the same time maintaining incentives to motivate and reward people for working hard to get ahead, thereby increasing their own incomes and generating higher tax revenues for the government.
Under our current system, income taxes alone are not sufficient to cover government expenditures, and rather than increase the taxes paid by the wealthy and corporations our governments have created an array of consumption taxes. These include the now-defunct Federal Sales Tax, the Provincial Sales Tax (PST) in most provinces, and the Goods and Services Tax (GST), now combined in some provinces as the Harmonized Sales Tax (HST), in addition to specific additional taxes on gasoline, entertainment, alcohol, and other items. These taxes are not considered progressive since they cost lower income earners a larger percentage of their income than they do higher income earners. For instance, two people earning vastly different incomes would pay the same amount of tax on a tank of gas.
Naturally, managing these billions of dollars of ever-expanding services and the labyrinthian system which collects these taxes requires the hiring of more civil servants with their inflated salaries, luxurious benefits packages, and eventually unsustainable pensions, driving yearly deficits and long-term debt ever higher.
Note that while the private sector reeled from a collapsing global economy in 2008 and 2009, the growth of the public sector continued unabated. The expansion of the federal civil service as an example, in the five years of Stephen Harper's rule so far, is nothing short of stunning. And the corresponding increase in public sector wage, benefits, and pension settlements has grown hand-in-hand with the deficit.
Had we built this country and provided these services with cash flow generated by a thriving economy and an efficient tax-based government we could all be rightfully proud. Unfortunately we have built this country by mortgaging our future, and the mortgage renewal date is coming soon.
The bell jar is a system that protects and isolates a developing country's tiny class of elites. These elites are shielded by laws and customs from having to compete with the majority in their society.
Hernando De Soto22
The bell jar concept can be used to describe all societies wherein a “protected class” lives within the bell jar and a “vulnerable class” lives outside. The guiding principle behind democracy and Canada's Charter of Rights and Freedoms is to include all Canadians within the bell jar. Certainly when it comes to access to and protection under the legal system, the opportunities of higher education, gender and ethnic equality rights, and freedom of speech and religion, Canada is inclusive. However, when it comes to economic principles within our society, many of us are stuck on the outside of the bell jar.
Figure 1.3 Canada's Growing Civil Service
As we will see during a closer examination of the disparity between the salaries, benefits, and pensions of private and public sector workers, public sector unions have successfully insulated their members within a bell jar which excludes non-member taxpayers. More specifically, these unions have engineered a redistribution of wealth from all levels of society into the bank and pension accounts of their members.