When we had our last check in for this instalment in February of
this year, we had reviewed cost-containment and fiscal restraint
facing a few different governments. As we are all aware, this
is a problem not going away any time soon whether it be in Canada
or elsewhere. Where are we today in this ongoing saga?
Just south of the border, the financial troubles faced in
Detroit that led the city to declare bankruptcy in July 2013
recently were in the news again. As part of the effort to
emerge from bankruptcy, Detroit's public sector retirees and
current workers voted to accept an arrangement that will see
previously agreed upon pension benefits and/or cost of living
increases be reduced by up to 4.5%. Interestingly, only
around half of the approximate 32,000 retirees and workers eligible
to vote did in fact vote on the issue.
Closer to home, Ontario's focus on restraint appears to be
continuing following a spring election that resulted in the
Liberals achieving a majority government. Public sector
compensation, whether paid directly by the Government or through
transfers to institutions such as hospitals and universities,
accounts for half of Government spending. Management of this
compensation has been identified by the Government as an important
priority. In the recent budget and related commentary, with
little exception, the Ontario Government is publicly taking the
position that there will be no new money for compensation increases
in collective bargaining. The exception is an increase for
front-line child care workers in licensed establishments and
personal support workers who are working in publicly funded homes
and the community care sector. An example of the
Government's approach is seen in the four-year agreement
recently reached with its 10,000 professional and administrative
employees (AMAPCEO) that apparently contains no overall increases
to compensation. Legislation was also recently introduced to
extend a freeze on MPP salaries until the budget is balanced in
2017-18 (the freeze has been in place since 2009). (See our
July 31, 2014 Communiqué titled
"Broader Public Sector Accountability Bill
Re-Introduced" for other initiatives of the Ontario
Government to manage the public purse.)
On the west coast, B.C. appears set to begin the school year
without a collective agreement with its teachers. A strike
that began near the end of school in June has continued through the
summer. The teachers and the B.C. Government last met to
bargain in early August. A mediator has been appointed but
there appears to be no mediation date set at this time.
Earlier in the year, a court in B.C. had declared that legislation
that cancelled a collective agreement and made certain other
changes was unconstitutional. The saga continues as the B.C.
Court of Appeal granted a stay of the implementation of the lower
court decision pending an appeal by the B.C. Government. But
not all appears to be conflict in B.C. Under the "2014
Economic Stability Mandate", the B.C. Government has now
reached tentative or ratified collective agreements affecting about
half of its 300,000 public sector workers. As an example of
this process, the deal reached with 15,000 community health workers
earlier this year provides for a 5.5% wage increase over 5
With public sector compensation forming a significant part of
provincial budgets, we can expect that negotiating collective
agreements with the unions that represent the employees to continue
to be a focus and challenge for governments in Canada. And
for the taxpayer.
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