Former bank economist proposes ‘net-zero’ contracts, limited bumping, successorship
The release of the much-anticipated report on public service reform in Ontario has provoked frustration on one side of the bargaining table and a measure of satisfaction on the other.
Nicknamed the “Drummond Report” after author Don Drummond — a former federal finance official who played a key role in wrestling down Canada’s large federal deficit in the 1990s — the government-commissioned report contains austerity measures to keep a $16-billion deficit from spiraling out of control.
It is a “compilation of age-old wish lists… that I don’t see as a plan ahead for Ontario,” Ontario Public Service Employees’ Union (OPSEU) president Smokey Thomas calls the report.
In contrast, the report is “certainly on the right track,” says Satinder Chera, the Canadian Federation of Independent Business’ (CFIB) vice-president for Ontario.
The report devotes several pages to recommendations aimed at labour relations and compensation among the public and broader public sectors.
Together they account for 17 per cent of all jobs in the province in a range of industries from health care and education to social service agencies, colleges, child welfare agencies and beyond, roughly 70 per cent of which are unionized.
With wages and compensation accounting for one-half of all provincial government spending, the report looks at ways to streamline the bureaucracy.
Instead of wage freezes, it recommends providing zero budget increase for wage costs which will “help to maintain the type of healthy tension that drives out inefficiencies,” the report said, adding that “… history shows that wage freezes are often followed by wage catch-up periods.”
“It’s no different than households,” says Chera. “When you need to save money you have to start looking at costs. If you want something, you have to find the savings internally.”
However, it’s a myth to think many public agencies have even had budget increases over the past few years that would allow them to find room for higher wages, according to Thomas.
“They’ve been operating with very little for a long time,” he says. “They’ve been trying to figure out how to give raises and haven’t been able to in the past 10 to 15 years.”
A recommendation that would see an end to seniority rights, known as “bumping,” and the suggestion the province weed out “deadwood” from the civil service also concerns Thomas.
“The focus must be on retaining good employees while letting go of those who are not performing well,” the report says.
“Labour rights are human rights,” Thomas says. “The government would end up in a legal quagmire in the courts if it imposed some of these recommendations.”
Alternatively, legislative change may be what’s necessary, says Chera.
“I remember two years ago when the province said, ‘Can you voluntarily take a wage freeze?’ and (unions) said no,” he says.
The Drummond report goes beyond wages to tackle the collective bargaining process itself.
It suggests the arbitration process “needs to be shifted in favour of more objective analysis, based on objective criteria and supported by systematic data and research.”
Ontario Federation of Labour (OFL) president, Sid Ryan, accuses Drummond of trying to “stack the cards” against unions by also recommending the province establish a roster of provincially appointed independent arbitrators.
Ryan questions the need to fix a system that, according to him, isn’t broken.
“That completely skews the process and I think that’s where Drummond is going with this,” Ryan says. “It’s tilting the balance further against unions.”
The report likely isn’t palatable to union leaders, acknowledges Chera, but he says “there’s no choice.”
“Fifty per cent of the provincial budget is related to wages, salary and compensation for the public sector. You can’t tackle this behemoth without looking at that,” he says.
If adopted, the Drummond report could result in other changes, too.
With a highly fragmented system of more than 3,900 bargaining units in the province, the report says the bargaining structure needs to change.
It suggests voluntary centralized bargaining, an approach OPSEU has advocated for years, particularly for municipalities bargaining police and firefighting contracts.
“Why not strike one agreement?” Thomas says. “And everybody would save money on both sides.”
Thomas and Ryan both predict labour unrest if the recommendations are adopted.
“It has the potential to be an all-out war,” Thomas says. “But the ball is in the province’s court. The sky has not fallen, but it is serious.”
Chera, on the other hand, is optimistic about the future of labour relations in Ontario with these changes implemented.
“I take heart in the settlement in Toronto (between the city and the Canadian Union of Public Employees),” he says. “There is some goodwill out there. And these issues are not going away.”
