The BC government normally likes to keep what it calls its “bargaining mandate” secret while it negotiates with unions to settle more than $38 billion worth of annual compensation to public sector workers.
But an extraordinary split recently between the province and its largest union, the BCGEU, has exposed the bargaining mandate far earlier than usual – and highlighted how far apart major unions and the province actually are on wages.
The government has prepared what it calls a “Shared Recovery Mandate” for public sector unions and their more than 393,000 members, including teachers, nurses, government staffers, social workers and more. It’s a three year offer that combines a flat rate wage increase in year one, with percentage hikes in all three years, plus a signing bonus on top to sweeten the deal.
Let’s break it down.
Signing Bonus
The government is offering a $1,000 signing bonus to the BCGEU’s 33,000 members, in what it calls a “shared recovery supplement.”
That’s taxed, which means it’s far less by the time it lands on an employee’s paycheque. It’s also not considered pensionable earnings.
Signing bonuses have been deployed before by governments to get labour deals. In 2006, Finance Minister Carole Taylor had a pot of $1 billion from which to dispense cash bonuses, and they averaged out at almost $4,000 per employee.
The signing bonus serves two purposes for government – it offers union members a tangible cash incentive, which they can imagine spending on a large TV or vacation. But it’s also far cheaper for provincial negotiators, because a $1,000 bonus to almost 400,000 public sector workers is a one-time cost of $400 million, whereas a 1 per cent wage increase is roughly $311 million that year which then compounds and is built upon every subsequent year of salary increases.
Combination flat-wage and percentage wages
The first year of the province’s offer looks odd on paper – a $0.25/hour wage increase, plus 1.75 per cent. It’s designed to target lower-wage members of the union. Someone earning $20 an hour who gets both the 25 cent hourly increase plus the 1.75 per cent wage hike actually sees their salary rise almost three per cent that year. For higher-income union members, it’s not nearly as much.
The government offer is intended to target those in a union at the lowest end of the pay scale.
The BCGEU has a similar proposal in its second year, with a flat-rate increase, though the union has not publicly specified how much it is seeking.
Inflation
Government’s “Shared Recovery Mandate” doesn’t appear too concerned with the record-high inflation facing British Columbians – which reached 4.7 per cent in February and 5.7 per cent nationally, according to Statistics Canada.
Instead, government is offering 2 per cent annual wage increases in the final two years of its three-year deal, which is far short of matching inflation. In fact, 2 per cent annually is what the BC NDP government and unions agreed to in the 2019 “Sustainable Services” mandate. Three years later, government wants basically the same deal.
Meanwhile, the BCGEU wants its wages tied to either the rate of inflation or 5 per cent annually, whichever is higher. Anything less and the union says its members would be falling behind the rising cost of ordinary goods.
Costs
Neither side will say exactly what their proposals will cost taxpayers, but we can take some informed guesses based on previous cumulative estimates. The government’s three-year deal is likely worth more than $4 billion. The BCGEU’s two-year offer is likely worth more than $6 billion.
The government set aside up to $10 billion in funding in February’s budget, but it doesn’t want to spend all of that on union deals and needs to earmark some for other emergencies like forest fires this summer.
The path forward
The BCGEU said it’s currently negotiating to define essential service levels with the province before expecting to hold a strike vote with its members in “early May.” After that, it would be in a position to provide 72 hours’ notice for job action, with the expectation it would start with things like withdrawing overtime in some areas before ramping up to an eventual full-scale strike.
The government, meanwhile, will likely sweeten its offer.
You could easily expect the $1,000 signing bonus to double or triple, as a cash enticement. But the 2 per cent annual increases are likely to have much less wiggle room.
The huge gap between the two sides will only become worse once the BC Teachers’ Federation and BC Nurses’ Union come to the table later this year with their own set of demands and salary expectations. The nurses have a particularly good case due to recruitment, retention, burnout and staffing shortages.
All the unions have me-too clauses, meaning whomever negotiates the best deal in the months ahead will have those terms applied to all the other unions automatically. That’s one of the reasons the government usually holds its bargaining mandate so close to its chest until the last minute. This year, however, from the start, everyone can see the cards the province is playing.
Rob Shaw has spent more than 13 years covering BC politics, now reporting for CHEK News and writing for The Orca. He is the co-author of the national best-selling book A Matter of Confidence, and a regular guest on CBC Radio.
