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Gov't Mum on How Union Raises Will Be Paid

Unions say new efficiencies, lower sick pay and overtime will fill the gap.

By Andrew MacLeod 4 Oct 2012 |

Andrew MacLeod is The Tyee's Legislative bureau chief in Victoria. Find him on Twitter or reach him here.

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BCGEU negotiator David Vipond: 'People of B.C. want their public service to be efficient and we've undertaken to do that.'

The provincial government has been saying the deals it has started signing with major public sector unions provide raises without adding any costs to taxpayers. So far, however, officials have declined to provide any accounting of how the deals will be financed.

"Right now all we have is their word," said Jordan Bateman, the B.C. director of the Canadian Taxpayers' Federation. "It all sounds so nebulous."

Last week the government announced tentative agreements with the 32,000 member B.C. Nurses Union and the 25,000 member B.C. Government and Services Employees' Union. The BCNU negotiated a raise of three percent starting April 1, 2013 and the BCGEU got a four per cent increase spread over their two-year agreement.

The deals were among the first three reached under the "co-operative gains" mandate, where wage increases are "made possible by productivity increases within existing budgets."

The mandate is similar to, but different from, the "net zero mandate" that was applied in the last round of bargaining and required the money for any wage increases to be found within the collective agreement being negotiated. Former finance minister Kevin Falcon claimed the net zero mandate saved the government $3 billion over two years.

Gains unclear

There will likely be claims of similar savings from the co-operative gains mandate, but so far it's unclear how they will be realized, though both the government and the unions say they're confident they will be.

BCNU president Debra McPherson said the tentative agreement will reduce nurses' workload problems and improve both patient care and patient safety. Besides the three percent raise, it adds the equivalent of 2,125 more registered nurses and registered psychiatric nurses by 2016, and requires health employers to replace nurses who are on leave.

The BCNU's press release described how replacements will work: "The criteria will be the needs of patients, not budget concerns."

A single paragraph in the release addressed measures to meet the government's co-operative gains mandate. "To help achieve the staffing improvements through the cooperative gains approach, the tentative agreement includes an increase in nurses' full-time hours of work from 36 to 37.5 hours a week effective April 1, 2013 paid at the newly-negotiated wage rate."

But in an interview McPherson said the increase in hours will amount to a 4.16 per cent raise for her members.

Asked how a raise saves the government enough money to fund other increases in the agreement, she said for one thing it will reduce the amount of overtime that gets paid. "Hopefully it increases productivity by an hour and a half a week for each member," she said. "It's about the productivity gain. Ask the employer about it. They'll explain it."

Health Ministry spokesperson Ryan Jabs, however, said the government will not be commenting or providing any further details until the ratification process is complete. "We're not going to put anything more out until they make that decision."

Sick days and Kaizen

BCGEU chief negotiator David Vipond told The Tyee, as we reported last week, the savings to pay for the raises in his union's tentative agreement will be found in two ways.

"One is on reducing sick leave by improving health status of employees, so we have online health assessment tools where people can evaluate their own health status and identify things they can do to improve their health," he said.

The project has been costed and there is a body of evidence that allows the government to predict what the returns will be, he said.

"The second thing is a modern version of the Japanese work philosophy of Kaizen, which is continuous improvement," he said. "The version we're using now is called Lean."

The idea is to work more efficiently by eliminating redundancy and overlap, he said. "People of British Columbia want their public service to be efficient and we've undertaken to do that and we hope it all works."

Asked what the consequences are if the savings aren't found, Vipond said, "If the gains aren't found it won't be for lack of effort. We're going to give it a go and we think it can produce a return."

The BCGEU and the government agree on the calculations, he said. "We're both confident it will occur. We've made assumptions on what those savings would be, as has the government, and they've incorporated that in their budgeting. Our task now is to deliver."

Be transparent: Bateman

The amount that will need to be offset for a four percent raise for BCGEU members is somewhere under $60 million, a Finance Ministry spokesperson said speaking on background.

He declined, however, to provide an accounting of how it will be done, saying the ministry won't provide any further details until the ratification process is finished. "We do believe the savings plan is realistic to accommodate the wage increase within budget," he said, adding that under the mandate the savings are required to be real and measurable.

NDP finance critic Bruce Ralston said that he asked then minister Kevin Falcon in some detail about the co-operative gains mandate during budget debate on May 8. "I didn't think the answers were very clear," he said.

At the time the main concern was whether unions would have enough information to be able to produce proposals for saving the government money, he said. Now that the BCGEU and BCNU have reached agreements at the negotiating table, Ralston said he's "not prepared to second guess the bargaining process."

Nor would he say whether he believes the government should account for how the deals meet the co-operative gains mandate, again saying the agreements were worked out at the bargaining table, which is the appropriate place.

Ralston asked, "Are they telling the truth? That would be pretty misleading if they're making a claim and there's nothing to it."

The Taxpayers' Federation's Bateman said that if the government's claiming to pay for raises through savings, it has to be more transparent in demonstrating how it's doing that. "Give us the hard numbers," he said. "Show us the business case. I think taxpayers deserve that kind of clarity."

The increase for the BCGEU members, which he acknowledged the union would argue makes up a bit for years when they didn't get a raise, is greater than the rise in the cost of living, Bateman said.

"All sides would benefit from having the cost savings clearly out on the table," he said. "There are so many questions. It's nebulous and it leaves a bad taste in my mouth."

He said he did not, however, anticipate the government releasing the details anytime soon.  [Tyee]

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