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Pension gamble could handcuff city

Decision wipes out $33 million in savings, threatens layoffs

Winnipeg police Chief Danny Smyth said he’s relieved the grievance has concluded and provided clarity for officers. (Mike Deal / Winnipeg Free Press files)</p>

Winnipeg police Chief Danny Smyth said he’s relieved the grievance has concluded and provided clarity for officers. (Mike Deal / Winnipeg Free Press files)

An arbitrator’s order that Winnipeg cancel its controversial police pension changes could put a multimillion-dollar hole in the city’s four-year budget.

The City of Winnipeg unilaterally altered the pension to save $33 million by the end of 2023. The key changes, which were set to take effect April 1, included removing overtime as a pensionable police earning, increasing employee pension contributions, and forcing officers to reach a minimum age of 55 before they’re entitled to full pensions.

Coun. Brian Mayes said the pension fight was a costly exercise and doesn't want the city to appeal it. (Mike Deal / Winnipeg Free Press files)

Coun. Brian Mayes said the pension fight was a costly exercise and doesn't want the city to appeal it. (Mike Deal / Winnipeg Free Press files)

About $14.7 million of the savings were earmarked to prevent an early budget proposal to lay off 34 police officers and 25 police cadets over four years. The city also expected to free up $1.5 million per year for front-line policing.

On Friday night, following grievance hearings in January, arbitrator Michael Werier ruled the city lacked the authority to impose the changes without a negotiated agreement.

Werier ordered them reversed. He also awarded $40,000 in combined damages to two police unions, plus another $400 per employee — a penalty of roughly $600,000.

Mayor Brian Bowman wasn’t available for an interview Monday. In an emailed statement, Bowman’s office said the mayor hasn’t decided if the city will challenge the ruling.

"He will… consider the options available to the City of Winnipeg," wrote spokesman Jeremy Davis. "The mayor’s current priority is responding to COVID-19 and its related impacts to the city."

Coun. Scott Gillingham (St. James), who serves as council’s finance chairman, said it’s too soon to say if the decision will be challenged. He said the city could dip into its rainy day fund to help address the impact, though it’s not yet clear how the budget will change.

"Right now, all options are being looked at," said Gillingham, noting the economic fallout from the COVID-19 pandemic further complicates the city’s financial blueprint.

Coun. Brian Mayes (St. Vital) voted against the police pension plan changes, arguing they shouldn’t be pursued without union consent. Mayes said Monday he hopes the city doesn’t further challenge the ruling.

"My view is this has been a very costly exercise to date and I don’t like our chances on appeal," he said. "We’re paying hundreds of thousands of dollars in damages because we decided to act unilaterally."

Coun. Kevin Klein (Charleswood-Tuxedo-Westwood) referred to the pension changes as an expensive "gamble." Klein said he expects the city will need to delay some capital projects and make other significant budget cuts to balance the books.

"There are several risks that are included in this budget with no backup plan. I’m concerned that we will have to go into more debt. I’m concerned that… we’ll have to look at layoffs," he said.

In a statement, Winnipeg Police Service Chief Danny Smyth said he’s "greatly relieved" the grievance has "concluded and provided clarity for the membership... We are now awaiting the city’s stated review of the decision."

The chief’s statement did not answer whether the WPS expects it can avoid officer and cadet layoffs without the pension plan savings.

Meanwhile, Winnipeg Police Association president Moe Sabourin said he doesn’t believe city council would allow police officers or cadets to be laid off. He accused the mayor of using the layoff threat to boost support for the city’s pension stance.

"I think that was more to scare some of our members and… bring us back to the table on the pension plan," he said.

Twitter: @joyanne_pursaga

Joyanne Pursaga

Joyanne Pursaga

Born and raised in Winnipeg, Joyanne loves to tell the stories of this city, especially when politics is involved. Joyanne became the city hall reporter for the Winnipeg Free Press in early 2020.

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