The federal government is understating the liability for its employee pension plans by $80-billion because it does not use “real world” investment returns in its calculation, a new report says.
A C.D. Howe Institute study has concluded the federal liability for pension plans now totals $227-billion, which is $80-billion more than the government reports in its Public Accounts.
“Ottawa’s calculations do not reflect investment returns available in the real world,” says co-author William Robson, who is CEO of the C.D. Howe Institute.
Two comments: 1) Like the US and unlike the europeans, the Canadians can simply inflate their way out of this problem. 2) the Canadian debt is much smaller than 10% of the US number.