The Ontario government is asking its public sector workers to make concessions to their wages and pensions in its 2012 budget, introduced at Queen’s Park on March 27.
The budget is calling for a public-sector wage freeze over the next two years and warned of possible legislative measures to enforce the pay freezes. The government says public-sector wages accounts for just over 50 cents of every dollar in program spending.
“Where agreements cannot be reached that are consistent with the government’s plan to balance the budget... we are prepared to propose necessary administrative and legislative measures to protect the public from service disruptions and also to protect jobs for teachers, education staff and health-care workers,” Finance Minister Dwight Duncan said in the legislature. “That is not a choice we would make lightly.”
The budget also contains efforts to make public-sector pensions less costly for taxpayers and sustainable for their members. Employees would be asked to reduce future benefits if a pension is in deficit, rather than seeking additional pension contributions from the government or employers. The government also hopes employees will share equally in pension costs with their employer.
Ontario’s deficit is projected to reach $15.3 billion by the end of March2012. This number is approximately $700 million lower than previously forecast. Without austerity measures put in place, the province’s deficit could top $25 billion in the next three years, according to the budget.
“This is the most sweeping budget this province has seen,” Duncan said.
Ontario is also proposing legislation that will require arbitration decisions to have written submissions by both parties and permit the Ontario Labour Relations Board to issue the award when a decision is not delivered within one year. The government says it will discuss, “with those employers with significant numbers of employees and a material impact on the province’s fiscal plan, and who have automatic access to arbitration, about additional tools they may need to live within their funding envelopes while protecting services.”
“When it comes to labour relations, McGuinty’s budget strikes an ominous tone,” says the Ontario Federation of Labour.
The budget purports to support free collective bargaining and creates a path to legislating a wage freeze for unionized workers, according to the federation that represents over one million workers across the province.
“Simply rolling corporate tax cuts back by 1.5 per cent would generate enough revenue to cancel cuts to social assistance and increase the income of recipients by 25 per cent,” said OFL President Sid Ryan. “Instead of looking for fair measures to generate revenue, [Premier Dalton] McGuinty is asking the most vulnerable to make greater sacrifices.”
Ryan hinted at a return to the “days of action,” ones the province endured during the time Mike Harris was in office.
“Over 60 labour unions and community groups have already pledged to challenge McGuinty's agenda of cuts in a mass rally at Queen's Park on April 21,” Ryan said.
The Ontario Public Service Employees Union (OPSEU) is calling the budget a “shameful disaster.”
“Reducing a deficit does not require a transfer of income and wealth from working people to the super-rich,” OPSEU president Warren (Smokey) Thomas said. “But by emphasizing cuts and privatization while ignoring options to raise revenues through greater tax fairness, Dwight Duncan is doing just that.”
The job losses in the public sector will lead to a spinoff effect of job losses in the private sector, Thomas said.
The government’s plan to freeze public service wages and reduce pensions is frustrating, according to the Canadian Auto Workers union (CAW).
"Mandating a wage freeze is an infringement upon free and fair collective bargaining,” said CAW president Ken Lewenza."Governments should be looking to find ways to enhance retirement security for all workers.”
Special interest groups supported the government’s budget, hailing its fiscal restraint.
Major cuts to public spending are necessary to reflect ongoing challenges handcuffing economic growth, but fiscal restraint alone will not revitalize Ontario's manufacturing sector, according to the Canadian Manufacturers and Exporters (CME).
“We must ensure manufacturing is the key to unlocking this province’s growth,” said CME Ontario vice president Ian Howcroft. “We will need all Ontarians — business leaders, unions, government and citizens — to join us as we chart our roadmap to prosperity.”
Manufacturing currently employs roughly 800,000 Ontario workers, what the CME estimates as 12 per cent of Ontario’s total labour force. In 2011, manufacturing sales climbed to $258 billion, up six per cent between January 2011 and January 2012 — one percentage point higher than the Canadian average, according to the CME.
The proposed changes to public pension plans will help ensure they remain affordable, viable and realistic over the long term, says the Association of Municipalities of Ontario (AMO).
"We knew this would be a tough budget," said AMO president Gary McNamara, noting that all indications suggest that Ontario’s public pension plans are in trouble.
The government has proposed to create legislation that would make interest arbitration "more transparent, accountable and efficient," the AMO says.
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