IAFF CANADA 2007 LEGISLATIVE FACT SHEET

Enhanced Canada Pension Plan

Benefits for Fire Fighters

Background

Fire fighting is a dangerous and physically demanding occupation. In the course of their duties, fire fighters are required to perform extremely strenuous tasks, enter confined spaces in burning structures, endure exposure to burning toxic chemicals and suffer exposure to communicable diseases. More recently, there is growing awareness and recognition that fire fighters suffer an increased risk of certain cancers as a direct result of their occupation.

Because fire fighting is a physically demanding and dangerous job, early retirement for fire fighters has long been accepted as being in the best interests of fire fighters and the public they serve. Accordingly, Canada’s Income Tax Act regulations identify fire fighting as one of six Public Safety Occupations who are permitted to retire early, at age 55.

A fire fighter who has spent a career in the line of danger on behalf of the public is deserving of an equitable pension in their retirement. But in a typical scenario, a fire fighter retiring at age 55 does not currently have the ability to make CPP contributions from age 55 to 60, even though this five-year period is within the definition of their contributory period.

The CPP “drop-out” provision that allows a worker to exclude their five years of lowest earnings from their CPP calculations applies equally to all workers and does not help fire fighters catch up to other workers in terms of CPP benefits. And without any other mechanism to make up for lost retirement income, a fire fighter retiring early at age 55 will typically have a retirement income of 60 per cent of their pre-retirement earnings, which is well below the benchmark of 70 per cent for working Canadians.

In response to this problem, the federal government in December, 2003, enacted a regulatory change under the Income tax Act regulations specifying that fire fighters can benefit from an increased annual pension accrual rate of 2.33 per cent for each year of credited service. The IAFF is grateful to the federal government for making this regulatory change, which will allow fire fighters whose registered pension plans (RPPs) are integrated with the Canada Pension Plan to argue that the increased rate should be reflected in their RPP provisions, thus enabling them to attempt to negotiate the higher pension accrual rate at the local level.

The majority of Canada’s professional fire fighters have pension plans that are integrated with the CPP. Those whose pension plans are not integrated with the CPP can have access to an equitable pension through direct changes to the CPP itself; specifically, through changes that would grant fire fighters earlier access to CPP benefits. An amendment to the Canada Pension Plan enabling professional fire fighters to receive reduced CPP benefits at age 55 and unreduced benefits at age 60 would help them achieve the 70 per cent pre-retirement income benchmark.

The need to amend the Canada pension Plan for fire fighters has been formally recognized through the introduction of legislation in the House of Commons, most recently in the form of private member’s bill C-306, An Act to amend the Canada Pension Plan (early pension entitlement for police officers and firefighters), which was introduced in the House of Commons in 2006 by Conservative MP Jeff Watson (Essex, Ont.), as well as M-25, a private member’s motion introduced in 2006 by NDP MP Peter Stoffer (Sackville-Eastern Shore, N.S.)

Bill C-306 if passed would enable fire fighters to access reduced CPP benefits at age 55 and unreduced benefits at age 60. M-25 states:

M-25 – April 4, 2006 - That in the opinion of the House, the government should    consider amending the Canada Pension Plan to allow for early pension entitlement for police officers and fire fighters.

The IAFF supports the passage of Bill C-306 and M-25 as effective ways to advance the issue of CPP reform for professional fire fighters.

IAFF Position

The IAFF supports any legislative or regulatory change that helps all professional fire fighters achieve pension equity with other working Canadians, including the reintroduction of legislation that would allow fire fighters earlier access to CPP benefits.

IAFF Arguments

• Fire fighting is a dangerous and physically-demanding job, and fire fighters suffer one of the highest rates of occupational illness and injury in the course of their duties

• Early retirement for fire fighters is not considered a perk or a luxury, but has long been accepted as being in the best interests of fire fighters and the public

• Fire fighters who retire at age 55 are unable to make CPP contributions even though this five-year period falls within the definition of their contributory period

• Fire fighters whose pension plans are of a type that is not integrated with the Canada Pension Plan do not have the ability to benefit from an increased pension accrual rate

• All fire fighters are deserving of an equitable pension in their retirement, one that would provide at least the benchmark 70 per cent of pre-retirement income

Current Status

It is now specified in the Income Tax Act regulations that fire fighters whose pension plans are integrated with the Canada Pension Plan can benefit from an increased annual pension accrual rate of 2.33 per cent. This stands to benefit professional fire fighters whose pension plans are integrated with the CPP.

But the federal government can ensure that all of Canada’s professional fire fighters have the ability to benefit from an equitable pension with changes to the Canada Pension Plan (CPP) that would allow fire fighters to have access to reduced CPP benefits at age 55 and unreduced CPP benefits at age 60, five years earlier than the general public.

Current legislative initiatives, such as Bill C-306 and M-25, are a welcome step toward enabling all of Canada’s professional fire fighters to benefit from an equitable pension in their retirement and the IAFF encourages debate and passage of Bill C-306 or M-25.

For more information about this issue or any other issue affecting Canada’s professional fire fighters, visit www.iaff.org/canada or contact the IAFF Canadian Office in Ottawa at (613) 567-8988.

The International Association of Fire Fighters represents 280,000 professional fire fighters in North America, including 20,000 in Canada. The IAFF is affiliated with the AFL-CIO and the Canadian Labour Congress.