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Saint John Ivan Court said the city must lobby the provincial government for help in meeting its pension obligations. ((CBC))

Many Saint John municipal workers are facing salary freezes and a watering down of their pensions as the city takes steps to control its pension deficit.

Saint John councillors debated the options to escape the significant pension shortfall at the Monday evening council meeting.

City employees watched grimly from the gallery — overlooking the councillors — as they debated a motion that would control the pension deficit.

Pat Woods, Saint John's city manager, said there was no easy way to solve the pension deficit.

"The bill is increasing by about $750,000 a month as we speak," Woods said.

Some city workers will face salary freezes but all will receive lower employer contributions to their pension funds.

Saint John is in danger of having assets seized if it does not make an overdue $5-million payment on its pension fund.

The city says it does not have the money but is considering some tough measures to tackle the fund's $129-million deficit.

The deficit has been growing for many years and was exacerbated by the 2002 stock market downturn, which saw the fund take a $92-million hit.

'Wage freeze is never favourable'

Union locals representing about half of city workers, including police and firefighters have not signed off on the deal. It is not clear if their approval is required.

Outside workers did, however, agree to reforms.

Mike Meehan, a union official, said the agreement was not ideal.

"A wage freeze is never favourable. This is not something any worker wants to hear," Meehan said.

Meehan represents a local union that extracted a deal to extend its contract by another two years at current employment levels in exchange for the concessions.

The council motion still depends on the provincial government giving the city more time to bring its pension fund up to the levels required by regulation.

Saint John Mayor Ivan Court said he must now start lobbying the provincial government.

"We'll be talking to members of the cabinet, [Saint John cabinet minister] Trevor Holder will be one of the first people we'll be approaching," Court said.

Court would not say what will happen if the province doesn't agree to the plan.