When we last reviewed fiscal pressures on governments to look for sources of cost-containment and restraint, the pressures were many. In looking for fiscal relief, some governments were turning to restraining compensation in the broader public sector. At the provincial level, the Ontario Government had, for example, passed wage restraint legislation and also legislation regarding collective agreements for teachers. At the federal level, the Canadian Government had intervened in labour disputes with legislation to get the parties back to work. So where are we now?
In Ontario, there seems to be relative labour peace with the teachers once again. The Ontario Government recently announced an increase in the minimum wage (see our blog dated January 30, 2014 “Minimum Wage in Ontario to Rise to $11.00/hr” by Alex Heaslip). But the Ontario Government does not seem done with trying to restrain wages through legislation. In December 2013, it announced that legislation would be introduced early in 2014 that would provide the authority for the Government to impose compensation “frameworks” and even a hard cap on the compensation of senior executives in the broader public sector in Ontario. This legislation has yet to be introduced, but we will keep an eye on it as winter marches to spring (eventually!).
At the federal level, we saw a lengthy labour dispute in 2013 between diplomats and the federal government over compensation. The dispute affected services in Ottawa and abroad at Canadian embassies, preventing many from obtaining visas needed to travel to Canada for pleasure, work, and school. Along the way, the Public Service Labour Relations Board found that the Federal Government had engaged in bad faith bargaining (arising from attaching certain conditions to a binding arbitration process with the union). Ultimately a resolution was reached in the fall of 2013, but the dispute highlights the difficulties involved with managing costs in the public sector and the potential impact on citizens and others who are consumers of the relevant public service.
More recently in Alberta, we saw the introduction of Bill 46 in 2013. This legislation would have imposed a collective agreement on Alberta’s largest public sector union if collective bargaining with the Alberta Government failed. The collective agreement that expired on March 31, 2013 would have been extended with certain modifications to compensation terms. This was supposed to take effect by the end of January, but has now been delayed to March 31, 2014 while negotiations between the parties continue.
Although some progress is being made by governments in Canada towards smaller budget deficits and even balanced budgets, the fiscal pressures remain strong. Based on the recent statements and actions, containing costs in the compensation of those employed in the broader public sector will continue to be a focus of governments across Canada.