The city council of Saint John, N.B. has voted to make a $8.7 million payment toward the city’s pension plan deficit on Monday, but that will hardly make a dent in the $129 million pension deficit.
“This payment unfortunately has to be made on behalf of the taxpayers of the city and [we] have to support it or it’ll be in breach of the law,” said city councilor Bill Farren, referring to a decision by the provincial pension regulator that the city could not defer its 2010 payment.
The problem is, the city has no room in its budget to make the lump-sum payment—the budget was approved on the assumption that the pension watchdog would approve the deferral.
“I can’t support this because first of all we don’t have any document before us,” said deputy mayor Stephen Chase. “Other than saying we’re going to pay it, there is no plan on how we’re going to pay it.”
Without reforms, the city has warned residents that they could face a 12% to 14% tax hike or up to $10 million in service cuts.