First published in the Winnipeg Free Press Friday July 14, 2017
By Lynne Fernandez and Ian Hudson
In March of 2017, the Premier claimed that for every one per cent the province lowered (or didn’t raise) wages for 120,000 provincial public sector workers, it would save $100 million. This simple calculation provides grist for Bill 28, The Public Services Sustainability Act which mandates all those who employ provincial public sector workers to hold future increases to zero per cent for the first two years of a new contract, no more than 0.75 per cent for the third year, and no more than 1.0 per cent for the fourth.
But will the province save $100 million? Not really. If we dig deeper, we see why. If we lump together all the 123,000 public servants (which includes not only those civil servants actually employed by the province but also all workers employed by health care authorities, education, and crown corporations, to name a few), the total bill for their wages and benefits is $9.6 billion, so a 1 per cent cut would save $96 million. But the Premier failed to account for the money the government would tax back from this income, which, using information from the Manitoba Bureau of Statistics (MBS), is at a rate of 16 per cent. So the reduction in taxes from the public sector wage freeze would be $15.4 million, reducing the net saving to $80.6 million.
Even that number is an overestimate because the wage freeze will reduce demand in the province and lower other Manitobans’ income. Using multipliers obtained from the MBS, we calculate that overall labour income decreases by $1.20 with a $1.00 initial change in demand, so labour income in the province will fall by an additional $19 million for a total of $115 million ($96m + $19m). The loss of $19 million will reduce tax revenue another $3 million for a total reduction in tax revenue of $18.4 million. That reduces the $96 saving to the province to $77.6 million. But we also have to remember that the total $115 million hit to labour income will negatively affect the province’s GDP.
Even that smaller $77.6 million ‘saving’ is questionable because not all these employees work directly for the province. Universities and school boards cut the cheques for workers in education. Healthcare professionals are paid by regional health authorities and agencies. In fact, the province only directly employs around 14,000 civil servants and pays a bill for wages and benefits of $1.1 billion. A one percent decrease in their wages would save the province $11 million dollars. Subtracting the tax lost just from the civil servants wage freeze brings that down by $1.8 million to $9.2 million. When the declines in civil servants’ salaries trickle down through the incomes of the people that they purchase from, the province wide reduction in tax is $2.1 million for an overall saving of $8.9 million. So, the direct savings to the provincial budget from Bill 28 is less than $9 million, less than one tenth of the $100 million figure.
The provincial government might argue that although it does not directly employ public servants outside the civil service, the legislated wage freeze does save public sector institutions money, which makes it possible to reduce their provincial grants. But it is the amount of the grants that directly impacts the provincial budget, not the wages of those who work for publically-funded institutions.
Bill 28 is an unnecessary intrusion into the governance of public institutions. The University of Manitoba, for example, claimed that the province’s interference in its collective bargaining process was unwanted, and only followed it under threat. The province should have established a grant level for the university and let the university and its union follow the regular collective bargaining process to see how to allocate the university budget between salaries and other demands on the university budget. This less heavy-handed approach would also avoid a costly and contentious legal battle.
The July 4th press release from the Manitoba Federation of Labour officially launched that challenge. At issue is whether any province can dictate to institutions that employ public sector workers how much they can and cannot pay their employees. Other provinces have passed such legislation (BC, and Saskatchewan) only to have it struck down by the Supreme Court of Canada (SCC). The SCC found that the Charter protected unionized workers’ right to engage in collective bargaining with respect to collective agreements.
Given that the SCC has upheld unionized workers’ right to collectively bargain, the only way the province can ultimately try to affect wages is by reducing how much money it transfers to institutions. It can better control the wages of those who work directly for the province, but even then the SCC would stipulate that the government, as the employer, has to bargain in good faith with its employees when collective agreements expire.
Manitoba now faces an expensive legal challenge that could take years to move through the courts and will further lower the value of any ‘savings’. The government knew the challenge was inevitable, but no doubt takes comfort in knowing it will at least be able to defraud workers of their rights as the legal procedures play out.
Premier Pallister claims he is an old union guy and understands workers’ concerns. But his government’s bad-faith tactics and sloppy fiscal calculations would indicate that he is not an honest broker in his dealings with public-sector workers – and Manitobans in general.
Lynne Fernandez holds the Errol Black Chair in Labour Issues at the Canadian Centre for Policy Alternatives MB and Ian Hudson is professor of economics at the University of Manitoba.
By Lynne Fernandez
Notwithstanding stable economic growth and consistently low unemployment, poverty remains a problem in Manitoba. In 2014, 11 per cent of Manitobans lived in low income. That’s down from 11.8 per cent in 2011, however child poverty continues to be stubbornly high, with the 2014 rate at 16.2 per cent. Read More
Winnipeg: The most recent living wage for Winnipeg, Brandon and Thompson will be released on Thursday June 29th at 12:00 at the Social Enterprise Centre, second floor 765 Main St. by economist Lynne Fernandez.
The Living Wage is a regional calculation based the amount that a family of four needs to earn to meet basic expenses. The living wage is based on the local cost of rent, groceries, transportation, child care and extended health care. It does not include debt repayment, pension or long term savings.
A living wage addresses child poverty and is an opportunity for employers to do better than pay the legislated minimum wage. The living wage takes into account government transfers and demonstrates how public policy in areas like housing and child care can positively impacts families.
The living wage calculation is a standard calculation used by the offices of the Canadian Centre for Policy Alternatives.
The most recent update in 2013 found the living wage for Winnipeg as $14.07/ hour, Brandon as $13.41/ hour and Thompson as $13.46/ hour. Join us this Thursday at 12:00 noon to learn how much it has increased.
Directions to the Social Enterprise Centre, 765 Main St.
By Shauna MacKinnon
On Friday May 26, I attended an impromptu event organized by supporters of the North Point Douglas Women’s Centre. The event was held to show support for the Centre, which was reeling from the news that it would not receive an expected $120,000 required for its operations. This represents one third of the Centre’s budget and losing it means that North Point Douglas Women’s Centre will be forced to cut important programs that are serving the community well. It got me thinking about reconciliation.
Indigenous women spoke passionately about the important role the Centre plays in their lives. They spoke about the culturally based programs that are helping them to heal from intergenerational trauma caused by government policies and programs like residential schools. As I listened to these women, it became clear that the Provincial government’s decision to cut funding for this and other community based programs serving high numbers of Indigenous peoples, is inconsistent with the Truth and Reconciliation Commission 94 Calls to Action and Manitoba’s Path to Reconciliation Act.
Premier Brian Pallister announced will be riding his bicycle from the St Peter’s Reserve (Selkirk) to Peguis First Nation this June 16 – 17 to recognize the 200th anniversary of the Selkirk Treaty. This blog summarizes the responses by Peguis First Nation member Tim Stevenson and CCPA Manitoba director Molly McCracken to the June bike tour.
A letter regarding the bike tour was sent to groups, including our office, along with a general invitation to all Manitobans to provide a letter to the Premier for delivery to Peguis First Nation. The Premier’s letter states:
“I invite you to join me in this mission of friendship by writing a letter to Manitoba’s Indigenous peoples, expressing your gratitude for the vital role they played in the formation of our province, as well as your optimism for the important role they will play in the future.”
As a non-Indigenous organization we thought it best to connect with Indigenous people on our submission and connected with researcher and food sovereignty leader Tim Stevenson, member of Peguis First Nation, who wrote “Victory Lap or Humble Ride” on his reflections of the journey. Stevenson writes:
“With the letters of thanks from Manitobans, it is hoped the premier learns the true history of Manitoba and the sacrifices made by the Indigenous people. I hope the letters will move him to actual reconciliation work in the province and to partner with Indigenous people”.
Stevenson calls on the Premier to be a leader in Indigenous relations, work with Indigenous health leaders and prepare a plan to support Indigenous health frameworks, ensure equitable participation in social infrastructure and social programs and partner with Indigenous people through implementing the Truth and Reconciliation Calls to Action.
As a leader in food sovereignty, Stephenson in “Victory Lap or Humble Ride” calls on the Premier to support Indigenous communities to uphold harvesting rights, strengthen co-management regimes for conservation and increase access to traditional foods outside of reserves, all with a view of improving health and well-being. The symbol of Manitoba, the buffalo, once a central source of livelihood for Indigenous people has been lost. Bringing back the buffalo would be an important effort to this end explains Stevenson.
The letter from Canadian Centre for Policy Alternatives (CCPA MB) director Molly McCracken respectfully submits evidence through international, national and provincial policy frameworks and the research of the CCPA MB goals for Indigenous-settler relations in Manitoba. The letter highlights CCPA MB research in partnership with Indigenous communities, such as Moving to the City: Housing and Aboriginal Migration to Winnipeg; Reconciliation Lives Here and Finding Her home: a gender-based analysis of the homelessness crisis in Winnipeg.
The CCPA MB letter (view it here: “CCPA MB letter Premier Bike Tour 2017“) explains how the bicycle journey can be a first step or a token gesture. The province has responsibility to act on the Truth and Reconciliation (TRC) Calls to Action, however this provincial government has not yet indicated they will do so. The letter asks if the Premier’s government has a plan to implement the TRC Calls to Action and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP)? Molly McCracken writes in the CCPA MB letter:
“The bicycle tour to Peguis First Nation from Selkirk appears to be a surface effort. A brief look at the history shows that this is the route the people of Peguis First Nation took when they were illegally removed from the band’s traditional home, the St. Peter’s Reserve, in 1907. The route is known as “Canada’s Trail of Tears” and the lack of acknowledgement of this fact in the letter makes the Bicycle Tour appear ill-informed and an incomplete token gesture.
The Premier has the opportunity to reconsider and reframe the bike tour as an opportunity to start to advance Truth and Reconciliation and take the time to learn from Indigenous leaders offering education such as Dr. Niigaan Sinclair and Peguis First Nation members like Tim Stevenson with the end goal of addressing inequities and supporting self-determination of Indigenous peoples.
This starts with settlers acknowledging that Indigenous peoples lived on Turtle Island (North America) for millennia before settlers arrived and have much more to teach us, especially today. The knowledge held by Indigenous peoples is key to our collective survival on the planet and Indigenous Manitobans are leading the way. For example tomorrow leaders gather in Sagkeeng First Nation for the Onjisay Aki International Climate Summit; this gathering will express a common vision, values and consensus on action-based solutions to climate change. McCracken writes:
“After just 200 years of settlement we are confronted with contamination of land via for example the hog industry (Commissioners’ Report); of the water via for example agricultural run-off into Lake Winnipeg resulting in harmful algea blooms (Lake Winnipeg Foundation); and of the animals, for example via the loss of the buffalo and now woodland boreal caribou (Wilderness Committee Manitoba). Climate change risks irrevocably changing life in our province and our planet (Prairie Climate Centre). These concerning environmental impacts are felt by all Manitobans particularly Indigenous peoples who are spiritually, culturally, socially and economically tied to this land. Indigenous peoples persevere, often in spite of what the colonizers have done. We need to change the dial on this conversation to become true and meaningful allies, in order to stand with Indigenous peoples, culture and ways of knowing so that we can live in a true sustainable way for seven generations and more.
Just as Chief Peguis shared his resources with the Selkirk Settlers to aid in their survival, now we need Indigenous peoples to help us survive on the planet in a sustainable manner into the 21st century and beyond.”
Letters from Manitobans regarding the bicycle tour can be submitted to the Premier’s office at PremierPeguisTour@leg.gov.mb.ca.
Molly McCracken is the director of the Canadian Centre for Policy Alternatives – Manitoba office
This year the Manitoba office of the Canadian Centre for Policy Alternatives celebrates 20 years of independent research, analysis and expertise. From last year’s talk by Naomi Klein to this year’s address by black freedom movement icon Angela Davis, the Canadian Centre for Policy Alternatives (CCPA) Manitoba is at the forefront of progressive thought in our province.
20 years of CCPA Manitoba research and commentary is due to the dedicated support of individuals, organizations and unions. If you are a supporter, thank you. If you are not – please consider donating today to keep progressive ideas on the public policy agenda. WE NEED YOU! Big right wing think tanks are active in Manitoba – we struggle for space in the media against them all the time. Thanks to your support we can make sure we’re at every key policy discussion and decision, such as presenting on the regressive Bill 33, which entrenches minimum wage as a poverty wage; read our presentations and commentary.
The following is a sampling of what we’ve been able to accomplish thanks to the support of Manitobans concerned about evidence-based public policy to advance social, economic and environmental justice. Read More