Ontario to appeal for public-sector wage freezes

Ontario Finance Minister Dwight Duncan will meet public-sector employers and labour leaders on Tuesday, where he will appeal directly to them to impose wage freezes. Mr. Duncan put teachers, nurses and other unionized workers on notice in the provincial budget in March that there will be no money for wage hikes when their collective bargaining contracts expire. But Tuesday will be the first time he delivers that message face-to-face to about 60 public-sector executives and union leaders.

“It's the next step in the conversation about compensation,” said a government official who confirmed the meeting. “The goal is to let everybody hear the same message at the same time, so there's no broken telephone.”

The meeting at a downtown Toronto hotel is expected to set a new, less congenial tone between the McGuinty government and the province's public-sector workers. The government campaigned during the 2007 election on its track record for restoring labour harmony in the province. But the global economic recession has left Canada's biggest province facing double-digit deficits for several years to come. In fiscal 2010-11 alone, the government is forecasting a deficit of $19.7-billion.

Labour leaders are bracing for tough talk from Mr. Duncan in the wake of the two-year salary freeze he imposed in this year's budget on MPPs and 350,000 non-unionized public-sector workers within the government and the broader public sector, including school boards, hospitals, colleges and universities.

Canadian Union of Public Employees Ontario president Fred Hahn said he plans to tell Mr. Duncan that wage restraints don't work, especially at a time when the economy is showing signs of recovery.

“It's a punitive, panic-driven measure that we think will hurt the economy,” Mr. Hahn said in an interview on Sunday.

The meeting will take place a little more than one week after Mr. Duncan said the government is no longer looking at raising money by selling off a chunk of the province's biggest Crown corporations.

The Globe and Mail reported last week that Mr. Duncan has ruled out merging four Crown corporations and then selling off a 20-per-cent interest in the resulting company, dubbed Supercorp. The sale could have raised $15-billion for the province, a windfall the Liberals had planned to use to help pay for campaign promises next year.

The government is now working on a Plan B to raise funding. That has some union leaders worried, even though many of them had urged the government not to sell Crown assets.

A labour leader who asked not to be named said he expects the change in plans on asset sales to stiffen the government's resolve to impose wage restraints across the broad public sector.

“An easy thing to do is target somebody who is going to resonate with the public,” he said.

The government has already laid the groundwork for overhauling the way the province's doctors are compensated in an effort to rein in ballooning health-care costs.

Health Minister Deb Matthews told reporters last May that she would like to pay more doctors through salaries. The majority of Ontario's approximately 24,000 doctors are paid on a fee-for-service basis, meaning they bill the provincial health plan for each service they provide to a patient.

In the budget, the government said it will honour existing labour contracts covering just over 700,000 unionized public-sector workers, a group that includes doctors, nurses, teachers and professors who bargain collectively.

(Karen Howlett)

(From Monday's Globe and Mail)