OTTAWA — Premier Brian Pallister's gambit to have Manitoba public servants work reduced hours and collect employment insurance would be a financial nightmare for Ottawa, with cities across the country demanding equal treatment.
"It's a really big deal to ask the federal government to pick up the tab on public-sector salaries at the provincial level," said Wilfrid Laurier University economist Tammy Schirle. "That’s a huge ask."
On Tuesday, Pallister said the only way Manitoba can avoid laying off public servants during the pandemic is to reduce weekly hours for non-essential employees.
He has asked Ottawa to allow such workers to collect employment insurance for the days they’re off work. That’s in line with EI's work-sharing program, which has only been used for private-sector employees.
"Any accommodations would then have to open that up to all public-sector entities, which is a much bigger bill at the federal level than I think anyone expected," Schirle said.
By law, most cities cannot run deficits. They are losing revenue from businesses, property taxpayers and fewer people are using services such as transit. They have far less capacity to borrow than provinces, Schirle said.
She suggested that if Ottawa allowed Manitoba to put its employees on part-time EI, municipalities would expect the same treatment.
“It's a really big deal to ask the federal government to pick up the tab on public-sector salaries at the provincial level. That’s a huge ask.” — Wilfrid Laurier University economist Tammy Schirle
When an employee remains on the payroll, their pension contributions and health benefits remain constant. It saves employers the expense of training and recruiting workers who later may replace those laid off.
The federal government has cited those issues as reasons it has rolled out wage subsidies.
"You have private businesses who are trying to stay afloat. In the public sector, it is easier to manage debt in a long-term view," she said.
When Gary Filmon was Manitoba's premier in the 1990s, he mandated public servants take off 10 unpaid days a year to cut costs.
Schirle was a student employee for the Manitoba government at the time, and recalled getting long weekends through what was lated dubbed "Filmon Fridays." Workers didn't receive employment insurance for those days.
As of Wednesday, no other province had said it wanted to follow Manitoba's lead to ask for EI for civil servants.
Wayne Simpson, a University of Manitoba labour-economics professor, said he can’t imagine the federal government allowing the move, considering the Liberals haven’t hinted at a furlough for federal employees.
"I can’t see it being in their interest either, to align themselves with laying off provincial employees," Simpson said.
“I can’t see it being in their interest either, to align themselves with laying off provincial employees." — University of Manitoba labour-economics professor Wayne Simpson
"I haven’t given it much thought because I don’t think it will happen."
Federal Employment Minister Carla Qualtrough told reporters Wednesday that officials are discussing Pallister’s idea, while others have asked for the wage subsidy to be applied to public-sector employers.
"There are ongoing discussions at various (federal-provincial) tables, in particular about how we can perhaps work to some resolution of this. But there’s been no decisions made," she said.
Three weeks ago, Pallister urged Ottawa to establish an emergency credit agency, to extend loans to provinces at a cheaper interest rate than what they could get on their own. Ottawa has made no public move toward such a measure.
"That was met with silence, so I don’t think that the federal government is spending a great deal of time thinking about these kinds of proposals at this time; they've got their own concerns and worries," Simpson said.
Prime Minister Justin Trudeau will have his weekly call with premiers on Thursday.
In a report this week, RBC Economics predicted the gross domestic product of all provinces would plummet this year because of the pandemic. Manitoba would have the best GDP growth among the provinces, at minus 3.7 per cent. However, the virus arrived comparatively late in the province, as did measures that closed most businesses.
Updated on Wednesday, April 15, 2020 at 10:19 PM CDT: Updates photo