Canada’s looming battle over labour

With contracts for half a million public sector workers to be negotiated this year, things could get very ugly
Members of the Canadian Union for Public Employees (CUPE) representing flight attendants from Air Canada protest labour disputes at the Toronto Pearson International airport in Toronto, September 20, 2011. Labour talks between Air Canada and its unionized flight attendants will resume later on Tuesday with both sides expressing hope that a last-minute deal was still within reach. The CUPE, which represents Air Canada’s 6,800 flight attendants, organized rallies at airports across Canada on Tuesday, some 14 hours ahead of a possible strike. REUTERS/Mark Blinch (CANADA - Tags: BUSINESS CIVIL UNREST EMPLOYMENT TRANSPORT)
Will it happen here?
Mark Blinch/Reuters

The Occupy movement, globally ubiquitous and proudly obtrusive, is remembered as one of the top news stories of 2011. In reality, the effort by various species of crank to take over public parks probably wasn’t even the most important “people occupying stuff” news item of the year, at least in North America. That honour rightly belongs to the February swarming of the Wisconsin legislature by up to 100,000 protesters dedicated to stopping Gov. Scott Walker’s “budget repair bill.” The new Republican governor, hoping to balance the state budget without reversing tax cuts of the past decade, struck at the collective bargaining rights of public sector workers, taking away their right to negotiate benefits and capping pay increases at the inflation rate.

The result was a ferocious multi-theatre battle over the value of public sector unions. It raged all year from the steps of the Capitol building in Madison to the state Supreme Court, the schools and universities, and even Wisconsin’s prisons, where guards threatened a wildcat strike and Walker countered by contemplating the use of the National Guard for replacement manpower. In August the state set a record for the largest number of recall elections held simultaneously in the U.S., as six Republicans and three Democrats in the state Senate were caught in the crossfire. (All but two Republicans survived.)

One wonders why this sort of massive fundamental confrontation over public sector unions—a type of confrontation that is all but perpetual in the United Kingdom—has been absent from Canada. It is not as though Canadian governments have failed to present pretexts for warfare. For 30 years the federal government has intervened in labour disputes only occasionally, but in 2011 Labour Minister Lisa Raitt went on a tear, threatening Air Canada customer-service staff with back-to-work legislation in June, pushing a Canada Post lockout of CUPW workers to binding arbitration by statute, and pre-empting Air Canada-CUPE negotiations in October.

Provincial governments, meanwhile, have been using “essential services” designations to cut off organized labour’s weapon of last resort. Almost immediately after it was voted into power in late 2007, Brad Wall’s Saskatchewan Party government passed legislation forcing public sector workers to negotiate “essential” service levels in their contracts and to maintain those levels in the event of a strike. Manitoba’s NDP government quietly did the same to hospital and personal care home workers in May 2011. Even Ontario’s Liberals stepped away from a legacy of union-friendliness to ban strikes by Toronto Transit Commission workers in March.

In December, the Conference Board of Canada’s annual labour-relations outlook noted that 2012 bears significant potential for ugliness. After almost a decade in which public sector wage increases annually outpaced those in the private sector, government workers fell behind in 2010 and 2011. Yet austerity remains the fiscal rule almost everywhere. In 2012, almost a half-million public sector workers across the country will enter contract negotiations with cash-strapped treasurers. Those sending representatives to the table include the 167,000-strong provincial public services of six provinces (Ontario, B.C., Newfoundland, Saskatchewan, New Brunswick and Nova Scotia); 140,000 health care workers in B.C., Saskatchewan, and Manitoba; 36,000 Toronto District School Board employees; the Canada Revenue Agency’s workforce of 32,000; and thousands more on the payrolls of institutions like Ontario Power Generation, the University of Alberta, and the City of Montreal.

British Columbia, with its relatively militant public sector unions, seems like a natural flashpoint. David Camfield, a University of Manitoba labour studies professor, points out that B.C. is very nearly the only place where illegal “sympathy strikes” have surfaced in an era of neo-liberalism. CUPE members in B.C. walked out in solidarity with Hospital Employees’ Union (HEU) strikers in 2004, and when the B.C. Teachers’ Federation defied an essential services law in 2005 and walked out, non-teaching employees under CUPE auspices supported their picket lines, organized illegal walkouts and rallies of their own.

“To understand 2012, you have to recall that the B.C. government imposed a two-year ‘net-zero’ bargaining mandate in 2010 that froze compensation costs,” says Bonnie Pearson, secretary-business manager for the HEU, when asked about the prospects for labour peace. “That was a set zero: any compensation adjustments had to come from other savings, which only a couple of employee classifications succeeded in finding. We’re coming out of two years of zeroes with economic expectations and, in particular, working conditions issues as well.”

The end of the net-zero period has unions licking their chops at an awkward time for B.C., which must repay $1.6 billion it received from Ottawa before the HST debacle. In jurisdictions where the treasury is more buoyant, the talk is less tough. Saskatchewan Union of Nurses president Rosalee Longmore says of the Saskatchewan Party regime that, “We have had a fairly good working relationship with this government.” For nurses, the bitter pill of the 2008 essential services law was sweetened by a burst of new hiring that saw the Wall government hire 800 new nurses. Longmore is optimistic the give-and-take spirit will continue in 2012. “Everywhere you look, labour faces different decisions. In New Brunswick they’re laying off nurses while we’re still hiring.”

What’s interesting is that this stick-to-your-knitting approach dominates at a time when deeper questions about public sector unionism are coming to the fore. Paradoxically, this is something that labour militants like Camfield and arch-conservatives can probably agree on. Camfield notes that deficit reduction can serve as a smokescreen for future privatization moves. “Governments and many in the media have painted unionized public sector workers as ‘fat cats’ who don’t deserve their past gains through collective bargaining,” he adds. “A real challenge for public sector unions is to make the case that other workers should support their defence of jobs with better pay, benefits and job security on the grounds that 1) there aren’t enough such jobs and 2) workers who don’t have such jobs don’t benefit when the minority of workers who do have them are forced to give up past gains.”

The natural reply from the other side, of course, is: “But they are fat cats.” There is endless quibbling over the “wage gap” between public sector and private sector workers. CUPE, in a December study, acknowledged that public sector pay was on average slightly (0.5 per cent) higher for comparable jobs. Business groups argue that the gap is even greater. But the CUPE figure leaves out the big issue: pensions. The median retirement age in Canada is now 62 for the overall labour force but still just 59 for public sector workers.

Last month, the C.D. Howe Institute warned that the lucrative defined-benefit pensions of federal employees, now all but extinct in the private economy, represent a $146-billion unfunded liability even according to the numbers in the Public Accounts of Canada. Using “fair value” accounting with realistic asset yields, the Institute said the figure is more like $227 billion. Factor in the total for the defined-benefit pensions of provincial public sector employees—teachers, nurses, civil servants—and you have a 12-digit financial promise that must either be broken by governments or covered by taxpayers.

The battle of public sector unions for relevance and legitimacy is a battle between this zero-sum perspective and the union view, which sees public sector pensions, benefits, and job security as setting a standard for fellow toilers outside government. This is precisely the quarrel that continues to be conducted in Wisconsin, on a scale and with a seething rancour no one could have anticipated even in the heartland of American socialism. Is the world divided into workers and bosses? Or taxpayers and tax harvesters?