Unions fight back over wage freezes

Governments plan to rein in spending as economy recovers
By Shannon Klie
|Canadian HR Reporter|Last Updated: 10/22/2010

When the recession took hold at the end of 2008, governments across Canada went into stimulus-spending mode, racking up billion-dollar deficits. Now, as the economy improves, those same governments are looking for ways to balance budgets and pay off deficits.

In several provinces, including Manitoba and Ontario, cost-cutting measures include a wage freeze for public sector workers, a move that has angered unions such as the Canadian Union of Public Employees (CUPE).

“It seems like public employees are being asked to shoulder more of a responsibility for the anticipated deficits that governments took on to stimulate the economy,” said Paul Moist, national president of CUPE.

However, just because governments have announced wage freezes doesn’t necessarily mean they’ll get them when collective bargaining is all said and done, said Moist.

“Many employers, outside of recessions, begin bargaining at zero but that’s not where they always end up,” he said.

In an effort to garner public support, the Manitoba Government Employees Union (MGEU), which represents more than 32,000 public sector workers in the province, has launched a series of TV ads to raise public awareness of the value of these workers.

“I think the public sometimes doesn’t understand or appreciate, necessarily, the kinds of jobs that public sector workers do and how important they are to making our communities run safely and in a healthy way,” said John Baert, a communications officer at MGEU.

Titled “Your Province, Your Services,” the ads feature various civil servants, including water-testing technicians and prison guards. The goal is to show the public how critical a strong public service is to ensuring the province continues to grow, said Baert.

Wage freezes in the public sector are bad economic policy because they will actually end up hurting the private sector, he said.

“What you’re doing, in fact, is affecting the private sector as much as the public sector if those members aren’t spending money,” said Baert.

“The government is thinking that pulling back on the public sector and public sector wages is going to be a panacea for balancing the books when in fact it may actually slow spending and may result in a longer recession than we might have otherwise.”

One of the main sticking points for the union was the government’s announcement of a two-year wage freeze before collective bargaining began, without consulting the union, said Baert.

“It is OK to bargain tough but don’t do it before you get involved in the process, don’t do it before you get to the bargaining table,” he said.

Contract negotiations are ongoing between the province and MGEU for about 14,000 public service employees.

“Manitoba is seeking to control public sector wage costs so the global economic downturn doesn’t result in lost jobs or service cuts. A two-year pause on further wage increases is a negotiating objective of the government for public sector workers,” said a Manitoba government spokesperson.

In Ontario, members of the Ontario Public Service Employees Union protested the looming two-year public sector wage freezes outside a resort in Collingwood where the governing Liberals held a conference earlier this month.

However, wage freezes for all public sector workers isn’t the only measure the provincial government has taken to balance the budget, said Alicia Johnston, a spokesperson for Ontario’s minister of finance.

The government has also frozen wages for members of provincial parliament, reduced the cost of generic drugs, stretched out the timeline for several transit projects and slowed the rollout of several new programs. Spending on government travel and consulting services has also been reduced, said Johnston.

“Overall, the government believes that Ontarians value and appreciate the contributions of those people who deliver their public services,” she said. “But those who are paid by tax dollars should do their part to help sustain our public services.”

Unlike some of its predecessors, the government chose not to rip up collective agreements or cut public services to balance the budget, said Johnston.

“We are running a significant deficit because of the enormous investment our government made in stimulus projects and protecting our public services,” she said.

“We feel that the approach we’ve taken on compensation is a balanced one and responsible. It will require employers and employee groups in the public sector to work together with the end goal of sustaining our public services.”

But the provincial government needs to look at the bigger picture, said Chris Bosch, director of research and education at the Christian Labour Association of Canada (CLAC), which represents many health-care workers in Ontario.

It’s not fair for the public sector to bear the brunt of the recession, especially as inflation increases, he said.

“What we’re going to get in two years is a net decrease in people’s earning power as a result of having no increases to their wages,” said Bosch.

As a result of the government’s stance, there will probably be fewer contract settlements because unions won’t want to go back to their memberships with two-year wage freezes, he said.

In the health-care field, this will lead to more arbitration decisions, said Bosch. However, CLAC is looking for innovative ways to work with health-care employers to find ways to increase compensation packages while still working within the austerity measures handed down by the Ontario government, he said.

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