INTRODUCTION

The basic task of a union is to bargain collectively with the employer for the purposes of improving employees’ terms and conditions of employment which may include job security, health and safety, working conditions, benefits and wages. This is most effectively accomplished with everyone’s knowledgeable participation and solidarity.

For the OPS, the first step in the process of negotiating a renewal agreement is the bargaining issues survey of the membership by the steward body. The summary results are then reported back to the membership at each local demand setting meeting.  This “on-the-job canvass” is intended to assist locals in choosing bargaining priorities at their local meetings that reflect the wishes of all the members. It is hoped it will involve more members in setting demands and create opportunities for members to discuss their concerns with their stewards. The establishment of this connection with the members is vital in a right to strike environment where the union – via the negotiating committee, the stewards and local executives – must be in touch with the needs and wishes of the membership in order to achieve the best possible settlement. 

The following section is designed to assist you by providing material which describes the present bargaining climate and how to formulate proposals in light of the projected state of the economy and the new political environment.

Our approach to the next round of negotiations will be influenced by our collective experience with this employer. Since Mike Harris was elected premier in 1995, thousands of OPS members have received surplus notices. Many have chosen to take severance or early retirement packages and leave the OPS. Some have moved on to new employment with divested services. Others who remain have had their lives turned upside down through the processes of bumping or redeployment to different jobs and in some cases to different locations as well. Others still remain “under the gun” as announcements are made about the eventual closing, restructuring or downloading of their facilities and workplaces. Even those that are left with a more or less secure job after the surplus notices have been announced, are forced to cope with increased workloads as fewer employees remain to do the same amount of work.

At the same time as OPS employees have experienced this process of upheaval, the Ontario economy has been steadily improving. This is not to say that the two are related, although this government does try to make that link as they claim their policies of downsizing and privatization have brought about and enhanced the economic recovery.

THE ONTARIO GOVERNMENT AND ECONOMIC RECOVERY

As with other countries in the industrialised world, in this capitalist system we live in there is boom and bust, economic growth interspersed with times of stagnation or recession. Public sector workers might not realize it from the message they get in their workplaces these days, but we are actually in quite buoyant times, economically, and this includes the revenue and financial picture for this employer.

Recent statistics provided in the 2000 Ontario Economic Outlook and Fiscal Review by the Minister of Finance, Ernie Eves (released in December 2000), paint a very rosy picture. The chart below summarizes the Ontario economic situation: 

Source: (2000 Ontario Economic Outlook and Fiscal Review; p.33)

The government expects job creation to continue to grow in 2001. An average job growth rate of 3.3% is expected for 2000, and up to 3.0% in 2001. Inflation is predicted to average 2.9% in 2000 and 2.5% in 2001. Interest rates are expected to remain low, and in fact, may go lower. The unemployment rate is expected to fall to 5.6% in 2001 from an estimated 5.7% in 2000. Consumer spending is expected to increase by 3.0% in 2001, following an estimated 4.3% increase in 2000. The Canada Mortgage and Housing Corporation predicts that Ontario housing starts will rise to 77,000 units in 2001, up from an estimated 73,000 units in 2000.

The forecast for the future Ontario economy is also very positive in the government’s view. Ontario is currently outperforming other economies including that of Canada as a whole and the other G-7 major industrial countries (see chart on following page). The Ontario GDP is expected to decline in 2001, but will still be strong (see page 78). 

Average Real GDP Growth for 2001: Ontario and G-7

 Source: (2000 Ontario Economic Outlook and Fiscal Review; p.44)


BOOM OR BUST?

In recent weeks, there has been a great deal written in newspapers and business publications about the current slowdown of the American economy. Economists and journalists appear to be avoiding the use of the “R-word” – recession – and instead rely on such terms as “soft landing” or “hard landing”.

Many Canadian economists are lowering their forecasts for growth in the GDP, which is the value of all goods and services in the economy. Private sector forecasters are now predicting that in 2001, the national GDP, at best, will only grow by 3.0%, and at worst, by a mere 1.6%. The Canadian economy was formerly expected to grow by about 3.5% in 2001. Economists are concerned since the Canadian economy is so closely linked to that of the United States. 

Others are not so concerned. Jim Stanford, economist for the Canadian Auto Workers, points out that if the American economy is doing so badly, why did employment in the United States increase in December 2000. Thomas Walkom states:

I do not know if we are entering a serious slump. The Canadian financial press suggests we are. But that may have more to do with the ongoing circulation war between The Globe and Mail and the National Post than with anything real; fear sells newspapers.
(“Be prepared for the spin on recession and tax cuts”, Toronto Star, January 16, 2001, p. A21)

In the final analysis, though, whether we are entering a recession or not may only be of academic interest to public sector workers. While the private sector has largely recovered from the 1990-1993 recession and in fact has made real gains above and beyond any increases in the cost of living, public sector workers have been living in a recession since the early 1990’s and have not benefited from the economic boom of the past few years.

 
Strong Growth Expected to Continue
(click on image at left to view) Strong Growth Expected to Continue
(click on image at left to view)

Source: (2000 Ontario Economic Outlook and Fiscal Review; p.34)

ECONOMIC RECOVERY FOR PUBLIC SECTOR WORKERS

On January 1, 1993, employees of the Ontario Public Service received a wage increase of 2%. The Social Contract Act subsequently suspended wage increases including movement on the grid for those still progressing to the maximum rates of their classifications. And worse yet, earnings were lost as employees were forced to take “Rae Days”.

The renewal contract of 1994 to 1998 provided no wage increases. The government argued “inability to pay” due to the deficit and OPS workers became preoccupied with their job security and hanging on to what they had since the government had predicted 13,000 layoffs would occur in the OPS and further demanded concessions from other parts of the contract. 

The current agreement provided increases of only 1% in 1999, 1.35% in 2000, and 1.95% in 2001.

While all this was happening to public sector workers in the OPS and elsewhere, the economy began a slow recovery. Inflation continued to increase, although at a moderate pace. Statistics on the Consumer Price Index are found in Tables 1a and 1b following this section (pages 93-94). You can see that while inflation was low in 1994 (Ontario’s annual average was .1%), it increased by 2.4% in 1995, 1.6% in 1996, 1.9% in 1997, 0.9% in 1998, 1.9% in 1999, and 2.9% in 2000.

How have OPS wages fared compared to inflation? The following chart calculates the increase in the cost of living from January 1994 to December 2000. 

Calculation of Increase in Inflation

As inflation continues to increase, so too the erosion of OPS workers’ wages will continue to grow. The Ontario government is projecting “moderate” inflation in 2001 of 2.5%. Therefore, the estimated increase in inflation for OPS workers could be 16.0% by December 31, 2001. During the same time period (1994-2001), OPS workers will have a total compounded wage increase of only 4.4%. The end result is that between January 1994 and December 2001, OPS workers will have experienced an erosion in their wages of 11.6%.

How have other workers fared in the same time period? Statistics on unionized wage settlements for public and private sector workers are available from two sources: the Ontario Ministry of Labour as well as Labour Canada. We provide data from those sources in Tables 2a, 2b, 2c and Tables 3a, 3b and 3c following this section (pages 95-100).

We provide a shorter summary of Ontario wage settlements here

Source: Ontario Ministry of Labour (OML)
*Average of three quarters available to date


It appears that private sector workers, while also experiencing job losses, have not fared as poorly when it comes to keeping pace with inflation. Those without COLA clauses in their agreements have received increases of approximately 13% over 1994 to 2000 compared to public sector workers’ increases of 6.5%. This is a difference of 6.7%. Those with cost of living clauses in their agreements have fared even better with increases of over 18% during this period compared to those in the public sector with such clauses receiving 9.6%, a difference of close to 9%.

Obviously public sector workers have been forced to make significant contributions to the Ontario economy over the past six to seven years not only with their jobs but with their earnings as well. Their wages have now substantially fallen behind those of their private sector counterparts.

Wage Trends: 1994 to 2000
(click on image at left to view)

Wage increases for the public and private sectors are compared to CPI statistics in the graph on the preceeding page. One can see that not only have private sector workers fared better than the public sector generally, but also they have at times exceeded CPI increases and made “real” wage gains to reflect their increased productivity.


ABILITY TO PAY

Public sector workers are in a somewhat unusual situation because although the Ontario economy is substantially improved from the recession of the early 1990’s, the provincial government and its transfer payment agencies are still crying “inability to pay” or perhaps “unwillingness to pay” as the government would prefer to give their constituents tax cuts rather than maintain and enhance public services. 

As can be seen by the chart below, the reduction of the deficit is better than expected. In fact, the government has proudly reported that they achieved a significant fiscal milestone by achieving a balanced budget plan one year ahead of schedule.

Source: (2000 Ontario Economic Outlook and Fiscal Review; p.13)

Furthermore, the government’s financial situation is improved because their revenues have improved: 

The strength of the Ontario economy is boosting tax revenue above the 2000 Ontario Budget projection. Tax revenue is projected to be $1,460 million above the 2000 Budget forecast.

- Personal Income Tax revenue is $1,200 million higher due to the vigorous pace of growth of employment and incomes in Ontario.

- Retail Sales Tax is $200 million higher as a result of strong growth in consumer and business spending.

- Employer Health Tax is increased by $60 million due to robust job creation.
Source: (2000 Ontario Economic Outlook and Fiscal Review ; p.49) 

The government further states that after recording a surplus of $668 million in 1999-2000, it is now projecting for 2000-01 a surplus of $1.366 billion! The chart on the following page gives an overall picture of the government’s revenue and expenditures.

The government can no longer, with honesty, state that it does not have the funds to pay for improved wages and benefits for the Ontario Public Service. The recent serious consideration that was given to raising MPP salaries by 42% indicates that the government does not have serious “ability to pay” problems.

As another indication of how flush the province is, an arbitration panel recently ruled that the Ontario government must give its 1,000 crown attorneys a 30% wage hike. This panel noted that political aides, deputy ministers and assistant deputy ministers had been given similar pay increases since 1999 and provincial judges were awarded a similar increase in 1998.

In his award, Arbitrator Kaplan noted that:

Ability to pay was not argued in this case. The economy in Ontario is booming and, in terms of job creation and deficit reduction, it has never been stronger. 

It is important to note that the Ontario government did not even argue ability to pay when faced with such a significant wage demand – one that carried a price tag in the area of $30 million. The province cannot argue an inability to pay when it comes time to bargain wages for the Ontario Public Service.

Public sector workers are entitled to make up lost wages due to erosion by inflation and to “real” wage gains for contributing to the province’s economic recovery. If this does not occur, public sector workers are in fact subsidizing their employer by being expected to accept substandard wages. In years past, when OPS and other workers, such as those in hospitals, have been subject to arbitration, it was a fundamental criterion developed and awarded by respected arbitrators, that public sector workers should not be expected to subsidize their employer in this manner. It was found that governments had the ability to raise revenue through taxes and other means, and that saving dollars on the backs of their workers was not acceptable. Now that Ontario’s economy and the government’s finances are doing so well, it is time for public sector workers to share in that recovery as well as making up for past injustices imposed on them.

2000-01 Fiscal Performance
(click on image at left to view)

Source: (2000 Ontario Economic Outlook and Fiscal Review ; p.48)

 

SUMMARY OF ECONOMIC PICTURE

The Ontario government obviously believes the province is in a period of economic prosperity. In the most recent financial statement, it was reported that revenues are up and the deficit is on the way down. Usually when the economy is buoyant workers can expect to share in the prosperity because, of course, their own productivity has enhanced the performance of the economy. Private sector workers have generally been reaping the rewards of a growing economy. Public sector workers have not. It is time to question whether this situation should continue. The Ontario government, the ultimate paymaster of all public sector employees, does have the ability to pay for monetary improvements for its employees but has chosen not to up to this point in time.


THE POLITICAL AND LEGISLATIVE ENVIRONMENT

Since the Crown Employees Collective Bargaining Act (CECBA) and the Ontario Labour Relations Act (OLRA) were changed in 1993 (Bill 117) by the NDP government and again in 1995 (Bill 7), 1996 (Bill 26) and 1997 (Bill 136) by the present government, it may be necessary to provide a guide as to how this has affected bargaining in the Ontario Public Service.

CECBA 1993

· OPS members were given the right to strike subject to the provision of essential services as stipulated under CECBA.

· Eight wage categories were eliminated and six new bargaining units created with an expanded scope of issues to negotiate.

· Issues such as job security and pensions were deemed to be central issues for negotiation at a central table that would apply to all six bargaining units.

· The union gained the right to bargain over any issues as previous restrictions that prevented bargaining on issues such as pensions, complement, the merit system and appraisal methods, work procedures and assignments and technological change to name a few were removed.

BILL 7, 1995

· The Conservative government in 1995 amended CECBA and the OLRA, when OPSEU was midway through bargaining to remove improvements provided by the NDP government. The most important of these was the removal of anti-scab legislation and in the case of CECBA, the change to essential services requirements that management employees be required to provide essential services and that essential/emergency service employees not be required to do “struck work” that is not essential during a legal strike.

· CECBA was also amended to remove successor rights for OPS workers (unlike other workers under the OLRA) so that their jobs could be privatized or downloaded and they would have no right to go with the work and carry with them their wages, benefits, seniority and other provisions of their collective agreement.

BILL 26, 1996

· This “omnibus bill” as it was referred to, which dealt with restructuring and “efficiencies” in the public sector, affected the pension rights of OPS members. Under the Pension Benefits Act (PBA), the Superintendent of Pensions can partially wind up part of a pension plan to help laid-off workers. The Ontario Government exempted itself from this provision of the PBA. This has the effect of depriving laid-off or privatized employees of enhanced benefits permitted under the PBA in these situations. These enhancements would have helped long service OPS employees to take their early retirement on the day they would have taken it had they kept working.

· We were able to negotiate Factor 80 enhancements and some bridging provisions in our collective agreement but the exemption above still stands.

BILL 139, 2000

· This bill, which supposedly strengthens workplace democracy and fosters economic growth as a result, mandates that employers will provide once a year to all employees who are represented by a union a document that explains the procedure of how to decertify a union.

· This draconian piece of legislation is supposed to help stimulate economic growth, but since the economy has been doing very well for several years before this bill was introduced, it is obvious that membership in a union has no ill effect on the economy. 

· That this bill would foster “workplace democracy” is hypocritical – this bill only suppress workplace democracy since it makes it harder for workers to join unions and easier for employers to get rid of them. Labour laws should protect workers, not employers, but Bill 139 makes it easier for employers to intimidate their employees into not exercising their democratic right to join a union.

THE COLLECTIVE AGREEMENT

Through all these legislative changes the rights and entitlements of OPS workers have been eroded or eliminated. The one protection that stands between OPS workers and this hostile government is the collective agreement.

It is the language in your collective agreement, particularly the provisions of Appendix 9, which the Union has vigorously defended in grievance arbitration that has stymied this government's efforts to privatize OPS employees' work. 

It is vitally important to the future of OPS employees and the Union that we keep these protections in the collective agreement. In fact, we must negotiate even stronger provisions to protect OPS members from future privatization, downloading of provincial services, contracting out and the erosion of our pension rights.