Business

What is fair negotiating for taxpayers?

The CFIB looks at ways to maximize bargaining techniques without breaking the bank - File
The CFIB looks at ways to maximize bargaining techniques without breaking the bank
— image credit: File

Earlier this week, Toronto Mayor Rob Ford reached a tentative contract with more than 6,000 outside workers. Details of the deal are still forthcoming, but Ford was quoted as saying this is "a fantastic day for taxpayers."

Vancouver and CUPE 15 have started negotiating new collective agreements covering 2,500 members. Many other cities across the province are in the middle of, or about to begin, negotiations on behalf of their taxpayers.

This begs the question: what should a fair negotiating position on behalf of taxpayers look like?

It should start with common-sense comparisons with private-sector jobs. Why should a public-sector clerk, bookkeeper, or engineer earn more than the equivalent job in the private sector? The private sector pays the taxes that pay the wages and benefits of public-sector employees.

The Canadian Federation of Independent Business used census data to compare 88 equivalent municipal and private-sector jobs across B.C. It shows a 10-per-cent wage premium in the municipal public sector compared with equivalent private-sector jobs. This jumps to a 35-per-cent premium in favour of the public sector when you include benefits. For example, it's common practice in the public sector to be able to bank and cash out sick days. In the private sector, sick days tend to be used only when you are sick.

The Independent Contractors and Businesses Association found Prince George has provisions for banking 1.25 sick days for each month worked - up to 172 days. Employees can get paid out for 50 per cent of accumulated days on retirement (with at least 10 years of service) or 25 per cent of accumulated days on termination.

In Vancouver, employees get a "gratuity day" for each four-month period they are not away sick. They can accumulate up to 120 days.

Employees can take their gratuity days as time off and get paid out for unused ones when their employment ends. Who was looking out for taxpayers when those costly provisions were being negotiated?

Wages and benefits make up a big proportion of municipal budgets. When these costs are not kept reasonable and under control, municipal government spending starts sky-rocketing. Over the past 10 years, real spending in B.C. municipalities has increased by 42 per cent while the population has increased by only 12 per cent.

Everything from property taxes to parking meter fees increases to pay for this overspending. Small business owners bear the brunt of it because they pay more than residents in property taxes. They are left with less money to buy new equipment, invest in employee training or give workers a raise.

Municipalities should follow the lead of senior levels of government and negotiate zero wage increases for the next several years.

It's time for common sense to have a place at negotiations. A "fantastic day" for municipal taxpayers is long overdue in B.C.

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