Detroit scenario unlikely in Canada, but for how long?
In the wake of Detroit’s bankruptcy, much of the news coverage has rightly focused on the undue impact the city’s collapse will have on the thousands of municipal employees who could no longer rely on their pensions.
The city’s managers had over-committed $18-billion in pension disbursements they had little chance of ever paying out. The fallout shed light on the inadequate funding of many public-sector pensions across the U.S., ringing alarm bells on both side of the border. North of the 49th parallel, pundits were quick to point out Canada’s public sector workers need not fear because their pensions, though not fully funded, were in much better shape than those south of the border.