Talk about spin control. Introducing legislation that would raise the tax workers and firms pay to support the Canada and Quebec Pension Plans by 73 per cent over six years, Paul Martin made it sound like he was doing us all a favour. "As a result of the actions taken by ourselves and the provinces," he told the house of Commons, "we have now preserved the Canada Pension Plan for future generations of Canadians." Future generations may not be in too much of a rush to thank the Finance minister. By "saving" the pension plan, Martin and his colleagues have stuck tomorrow's workers with a substantial part of the tab for current and past beneficiaries. Under the plan's original "pay-as-you-go" set-up, the present generation of workers was not required to provide for its own retirement, but merrily left the task to its kids. Indeed, at present contribution rates of 5.85 per cent of pensionable earnings, already 63 per cent higher than the rate that prevailed during the first 20 years of the plan, it's not even pay-as-you-go, but rather is running a large annual deficit.

True, by jacking up rates sharply in the short-term, to 9.9 per cent by 2003, the Finance ministers have made the plan a little less unfair to future generations than it would have been had it been left on a pay-as-you-go basis. Rather than make them pay the full cost of providing for the baby- boomers in their dotage, which would have pushed rates all the way up to 15 per cent at their peak, the changes mean a larger part of the burden will be borne by the feckless boomers themselves: in pension jargon, the plan will be more fully "funded." By putting their savings to work, moreover, the amended plan can supplement its revenues out of the returns on its investments.

But that hardly makes it a sweet deal for future generations. Under the old, pay-as-you-go plan, according to calculations by William Robson of the C.

D. Howe Institute, workers born after 1980 stood to "earn" about 5 per cent on their contributions -- that is, totting up their expected benefits after retirement, and setting these against their expected contributions. That's a small fraction of the 30 to 40 per cent returns that accrued to the first generation of CPP retirees, many of whom had contributed for only a few years.

More to the point, that 5 per cent is yards less than they might have earned had they been allowed to invest their contributions on their own. At a still- modest 8 per cent annual return, Robson figures, today's high-school senior could put together a nest-egg at retirement that would better his CPP payout by an amount equal to some six years' wages. Under the "reformed" plan, that gap would close, but not by much: to between 4 and 5 years' wages.

At best, then, the Finance ministers have bought themselves some time. If the inter-generational inequity is not so glaring as it was, the public pension plan still represents a large net loss to tomorrow's workers. As they enter the work force, and more importantly, as they begin to vote, political leaders will have a harder and harder time persuading them of the plan's virtues.

Meantime, the reform has raised problems of its own: namely, how to rein in the beast that the Finance ministers are about to set loose in the nation's capital markets, the new and improved CPP Investment Fund. The old, pre- reform fund was enough of a travesty, required by law to invest in nothing but provincial bonds -- and at below-market rates, to boot. But the new fund, bulked up with all those surplus contributions and free to buy shares in private companies, is a potential nightmare. At an estimated $135-billion in ten years' time, it would be worth as much as the Caisse de Depot et Placement du Quebec, the Ontario Teachers' Pension Plan and the Ontario Municipal Employees Retirement System -- combined.

For now, the fund will be restricted to a "passive" investment strategy, meaning it will buy a broad mix of stocks mirroring the market indexes. But that admirable restraint comes off in 1999, and it's clear the people in charge have more ambitious schemes in mind. Martin, for example, confesses to being "an apostle" of the Caisse de Depot's approach. Is this what we really want: a mammoth, government-run investment fund, with the money and the mandate to take controlling stakes in private firms, hire and fire directors, block takeovers and otherwise tilt the scales in the capital markets to suit the whims of the government of the day? Socialism by the back door? Is the Canadian Caisse, as Martin is already calling it, to be the vehicle for the same mix of nationalism, dirigisme and plain-old cronyism for which the original is justly famous?

The government will protest the fund is to be run at arm's-length: but much the same is claimed for the Caisse. The fact is that wherever and whenever these funds have been amassed in government hands, they have been abused.

If we are going to go down this road, we had better have much more stringent safeguards in place than we have been given so far.