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A look at Winnipeg’s city council pension

Gold Bars 1000 grams. Concept of wealth and reserve.

A little while ago, I did a bit of research into Winnipeg’s City Council pension plan and thought I would post the findings in case anyone would like to take a closer look.

In short, here’s the big picture calculation – over the past 10 years for which data is available (2009-2018), taxpayers and council members contributed the following amounts to the pension:

Taxpayers paid: $4,375,848
Politicians paid:     $925,433

In other words, Winnipeg taxpayers put in about $4.73 for every $1.00 put in by members of Winnipeg’s city council. You can see all the data for each year if you – click here.

As you can see from this report that I wrote while working for the Canadian Taxpayers Federation, the bill is quite high compared with other cities – Winnipeg taxpayers paid more for their council’s pension than Ottawa and Edmonton combined between 2007-2016.

Winnipeg’s city council has shown it has the appetite for pension reform as of late – they recently attempted to amend the Winnipeg police pension. More recently, the city has also claimed it could be facing a $73 million shortfall if COVID-19 continues until July.

In light of those two factors, perhaps council might want to review its own pension?

In the grand scheme of the city’s budget, the savings would not be significant in a single year. However, as council addresses the city’s cost pressures, it will be hard for them to ask city employees to tighten their belts if council hasn’t tightened its own.

If Winnipeg does decide to review its council pension situation, the City of Edmonton is one worth replicating. As you can see from the bar chart on page 6 of the aforementioned CTF report, Edmonton’s city council pension costs are smooth over time and don’t spike like Winnipeg’s does.

The bill for Edmonton’s council pension doesn’t spike because it’s structurally different from Winnipeg’s – they have what’s known as a “defined contribution” pension as opposed to a “defined benefit” pension. In plain English, their plan protects taxpayers from having to bail out the pension with large sums of money whenever the plan runs into trouble.

Edmonton’s pension may not be as generous as Winnipeg’s, but it’s still better than what 77% of those who work outside of government receive – no workplace pension at all.

Unless Winnipeg fundamentally changes the structure of its council pension plan, taxpayers should expect to pay more and more in the years ahead to continually bail it out. Just wait until there’s an update on the funds in council’s pension in light of the current recession…

Author: Colin Craig

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.