The bill is going to be very big, says Rob Shaw.
The BC NDP took a major step towards labour peace this week by inking tentative deals with two large public sector unions. But amidst the government’s self-congratulatory victory lap about the merits of unfettered collective bargaining, one major question went unanswered: How much is all of this going to cost?
We don’t yet know the complete answer. But the bill is going to be big. Very big.
The reason why, is that the double-digit wage hikes are only the tip of the iceberg.
The tentative contract provides between 11 and 13 per cent wage increases over three years to more than 93,000 government and health care workers, represented by the BCGEU and HEU.
Domino effect
The rest of the almost 500,000-strong public sector — including teachers, nurses and other major unions — will get at least the same wage increases, due to ‘me-too’ clauses in their contracts.
The wages alone will likely cost somewhere in the range of $10 to $11 billion, once you add up the compounded costs over three years — a not insignificant amount when you consider public sector wages make up more than half of B.C.’s annual $71 billion government budget.
But that’s not all.
New contracts with the HEU and BCGEU contain all sorts of side deals, which aren’t publicly costed.
The government’s new contracts with the HEU and BCGEU contain all sorts of side deals, which aren’t publicly costed but represent enormous policy promises by the NDP government.
For example, in the HEU agreement there is “a commitment to bring in contracted support services workers at Fraser Health P3 hospitals and facilities back in-house” — or put another way, move private sector jobs back into the public healthcare system, and into the union.
“This adds more than 2,000 staff to the bargaining unit,” the HEU said in its bulletin.
Good news, bad news
Good news for the HEU. A major expense for taxpayers.
Or consider the tentative contract’s $15.6 million “wage adjustment fund,” the numerous changes to wage grids, an agreement to higher “weekend premiums” and the commitment to pay for certain fees, courses and training to help retain and attract workers.
There’s nothing wrong with any of that — especially during a time when health care facilities are having to close due to lack of staff and burnout following the pandemic. But the costs will be added to the health ministry’s budget in a myriad of hidden ways, allowing government to hide the true financial impact of the deal.
There’s nothing wrong with any of that … but the costs will be added to the health ministry’s budget in a myriad of hidden ways.
The BCGEU contract has similar side provisions, including a “one time economic subsidy” payment equivalent to $4-an-hour for a 16 week period, retroactive to Apr. 1, for liquor distribution branch employees who had recently gone out on strike for the BCGEU. Plus everyone gets two extra days of paid leave.
What does all of this cost on top of just wages?
Finance Minister Selina Robinson wasn’t saying this week.
“It’s important to make sure that it’s a fair deal.”
Selina Robinson
“It’s important to make sure that it’s a fair deal,” she said. “It’s a fair deal for workers today and three years from now, which this is, as well as making sure that we maintain our fiscal responsibility to the people of British Columbia.”
Robinson refused to even acknowledge that the B.C. government put more money on the table to sweeten its mandate and secure the deal (it did).
Familiar strategy
The Opposition BC Liberals were quick to point out that all of this sounds somewhat like the way the BC NDP settled collective agreements in the late 1990s.
In 1998, then premier Glen Clark was desperate to ink deals with unions before an election, so he settled contracts that he told the public contained wage increases of zero, zero and two per cent over three years.
But what he didn’t say were all the side deals cut at the time, including “pay equity” adjustments and “low-wage redress” involving wage grids, classifications, and extra pay targeted to certain groups.
The next NDP premier, Ujjal Dosanjh, revealed the true cost to the treasury was 11 per cent.
As Vancouver Sun columnist Vaughn Palmer famously put it: “NDP math: 0 + 0 + 2 = 11.”
A similar thing appears to be playing out 24 years later as veterans of the Clark government — Premier John Horgan and his chief of staff Geoff Meggs — rush to get the union contract done before the party’s transition to a new leader.
“This government needs to be very transparent with the taxpayer about what this deal will actually cost them.”
Peter Milobar
“I think this government needs to be very transparent with the taxpayer about what this deal will actually cost them,” said BC Liberal finance critic Peter Milobar, who cited the 1998 deal as a cautionary tale.
“I think the taxpayers need to know the actual dollar figure that this agreement is going to cost, not just as a wage percentage, because the wage is just one component of a cost structure when it comes to any type of employment.”