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The Chestnut Conference Centre, once a hotel but now part of a non-descript student residence in downtown Toronto, is only a short walk from Queen’s Park but worlds apart from the stately brass and wood fittings of the seat of the provincial government.
As such, it was a suitable neutral ground for the first skirmishes of The Great Ontario Labour War of 2012. It was at the Chestnut that representatives of the McGuinty government met with officials of the province’s teachers’ unions to begin what all sides knew were going to be brutal contract negotiations.
The government’s objective was simple. They were to tell the unions that there was no money — none — for salary or benefit increases. The province’s fiscal picture was bleak. These were the financial parameters that had to be met.
On the afternoon of Feb. 22, the leadership of the Elementary Teachers Federation of Ontario, along with more than a dozen regional chairs, took their seats across from a small group representing the government side. A scripted statement outlining the province’s dire position was delivered. There was no new money.
The union, though, had its own agenda. Four years earlier, it had walked away from contract talks, despite a warning from the education minster at the time, Kathleen Wynne, that doing so could result in a worse offer later.
That’s exactly what had happened: the elementary teachers ended up with a contract that increased salaries by about 2% less than those of other teachers.
At the Chestnut, the union leadership responded to the opening foray by saying the 2% discrepancy had to be part of their discussions. The government side was bewildered. Did no one listen to the statement? The government wasn’t about to commit to additional spending. It didn’t even want to hold the line. These were concessionary discussions, solely meant to determine how much the unions would give back.
Dalton McGuinty and his Finance Minister, Dwight Duncan, had been laying the groundwork for these talks for weeks, vowing that austerity plans were the only way to balance the budget. The union negotiators said they would be back in touch, but if the 2% top-up wasn’t a possibility they didn’t want to keep talking. They walked out and would not return. Those discussions lasted about one hour.
The consequences of what would become a year-long stalemate were far-reaching. Teachers stopped performing extra-curricular duties. Mr. McGuinty and Mr. Duncan both left politics. And just this week, the governing Liberals announced that the 2012-13 budget came in with a deficit of $9.2-billion, $600-million lower than forecast. While the Wynne government touted this achievement as the result of its ongoing commitment to fiscal discipline and responsible management, the explanation is somewhat simpler: The McGuinty government took the wood to the unions in 2012, and this was the pay off.
One had to go beyond the fine print of the government’s Tuesday announcement to the updated Public Accounts to find that among its lower-than-expected spending accomplishments was this nugget: “one-time savings of $1.3-billion from reducing liabilities carried by school boards for sick-day banking and retirement gratuities”. These were the benefits that the teachers refused to surrender; the province only managed to eliminate them by imposing legislation the unions considered unconstitutional.
For the rest of this article, click here: http://business.financialpost.com/2013/09/13/theirs-to-recover-why-ontarios-fiscal-time-bomb-is-still-not-defused/