Ottawa’s wage offer reasonable, public-service union’s demands are not By: Tom Brodbeck Posted: 7:00 PM CDT Thursday, Apr. 27, 2023

Most Canadians would likely be happy with a nine-per-cent wage hike over three years. It’s below inflation, which hit 8.1 per cent in Canada last year and was 4.3 per cent in March. But under the circumstances, a three per cent annual salary increase would be a decent compromise.

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Hey there, time traveller!
This article was published 27/04/2023 (864 days ago), so information in it may no longer be current.

Some unions, such as CUPE Local 500, which represents 4,600 City of Winnipeg workers, have demanded employers meet them halfway on inflation. In CUPE’s case, the city obliged and a below-inflation deal (about 2.5 per cent a year over four years with a signing bonus) was struck last year. It was a middle ground both sides could live with.

By contrast, the union representing 155,000 federal government workers, who have been on strike since last week, has rejected a nine per cent wage offer over three years. Public Service Alliance of Canada national president Chris Aylward calls the offer “shameful” and is demanding Prime Minister Justin Trudeau get personally involved in contract negotiations.

During a rally this week on Parliament Hill, Aylward accused Trudeau of “turning his back on workers.” He said if the prime minister can do that to PSAC members (by “only” offering them three per-cent annual wage increases), he will turn his back on “every single worker” in the country.

During a rally this week on Parliament Hill, Aylward accused Trudeau of “turning his back on workers.” (Adrian Wyld / The Canadian Press)

The union leader even questioned the prime minister’s commitment to women’s rights.

“Prime Minister Trudeau calls himself a feminist; most of our members who are on strike, the vast majority (of them), are women,” Aylward said. “How can the prime minister say that he’s a feminist when he’s completely ignoring these workers?”

Probably because whether Ottawa offers PSAC workers nine, 11 or 12 per cent, it has nothing to do with Trudeau’s commitment to women’s issues.

Aylward says Ottawa is being unreasonable because the union has moved from its 13.5 per-cent wage hike demand while the federal government has refused to budge.

“That’s not how bargaining works,” he said.

In fact, Ottawa has already sweetened the pot. It increased its offer from 6.8 per cent over four years, to 8.25 per cent, and now nine per cent over three years.

The union also wants the right to work from home enshrined in the collective agreement, as well as less contracting out and more emphasis on seniority.

The sticking point, though, is wages.

Asked by a reporter if the union would be prepared to accept the nine per cent wage offer if the federal government moved on all other issues, Aylward snapped back: “No, next question.” Sounds like the union is the one being unreasonable.

Given the fact most taxpayers won’t be getting anywhere near a nine per cent wage increase over three years (and the reality that the federal government is still running a multibillion-dollar deficit), Ottawa’s offer seems eminently fair. The federal government is meeting the union halfway on inflation and there appears to be movement on other bargaining issues.

Context is important here. Canada’s economy is expected to weaken this year and may fall into recession. Federal government revenues are projected to rise only modestly in 2023-24 and Ottawa is already facing serious cost pressures, especially after committing to billions more in health transfers to the provinces and new spending in child care and a national dental plan (which benefit many workers, especially women).

Taxpayers are more than tapped out. The federal government plans to borrow well into 2028 just to pay for existing operating costs.

PSAC is demanding that wage increases keep pace with inflation, which is entirely unrealistic. To do so, wages would have to rise about four to five per cent a year over three years (going back to 2021). Most Canadians are getting nowhere near that kind of increase. If they did, it would drive up inflation further, followed by more wage demands and even higher prices. It would create an inflationary spiral that would cause severe economic harm. It’s not a viable solution.

The most effective way for governments to help low- and middle-income Canadians with inflation is through targeted support. That’s already happening to some extent through GST tax credits and other measures. Should there be more? Maybe. But giving federal workers — who are well paid and enjoy a defined-benefits pension plan most Canadians would give their left arm for — four or five per cent annual wage increases is not the way to do it.

Taxpayers are more than tapped out. The federal government plans to borrow well into 2028 just to pay for existing operating costs.

A nine per cent wage hike over three years is a reasonable offer. Aylward should tone down the rhetoric and take what’s on the table.

tom.brodbeck@freepress.mb.ca

Tom Brodbeck
Columnist

Tom Brodbeck is an award-winning author and columnist with over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.

Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.

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