Spare us vacuous tough talk

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Manitoba is on track to run a deficit millions more than forecast in the Selinger government's 2011/12 budget. Despite what the government may say about how bad it could have been, how it strived mightily to contain the damage in the face of emergency flood expenses, the public ought to demand the province get serious about cutting costs. That means taking hard steps, not just talking tough, when negotiations with public sector unions hit the table.

Some 9,600 publicly paid employees will see their collective agreements come up for negotiation this year. Finance Minister Stan Struthers is hinting his government may once again go after wage freezes, the strategy adopted by his predecessor Rosann Wowchuk in 2010. Ms. Wowchuk revealed to taxpayers a global recession meant Manitoba was looking at successive years of deficits. That called for tough measures, she said, warning public servants to agree to two years of no wage increases, or else.

In fact, there was no "or else." The NDP government publicly implored unionized workers to take wage freezes, while giving concessions that signed taxpayers up for extraordinary, future costs: pensions tied to inflation; fees that automatically rise to keep pace with counterparts in richer provinces; signing bonuses and high salary increases for subsequent years. These expensive concessions merely deferred costs for two years, despite the fact the government projects deficits will continue until 2015.

Manitoba is not unique, however, in digging its taxpayers in this way. Ontario also went for voluntary wage freezes from publicly paid employees. Side deals, arbitrated awards and signing bonuses compounded with the commitment to higher increases in subsequent years rendered the exercise in restraint all but futile in a province battling a $16-billion deficit.

Like the Manitoba tack, Ontario simply wanted to buy itself peace and made costly deals that took the edge off short-term pain.

The NDP's tough talk on wage increases was a bit of theatre with a huge measure of opportunistic realpolitik. As deficit financing became part of the province's fiscal management scheme -- after a decade of steadily rising federal transfers, the government could no longer sustain its rapidly rising rate of expenditure -- it mocked up public pronouncements to appear equal to the task of taming expectations. But privately, it used improvements to benefits as a trade off, thereby maintaining the alliance with unionists. The NDP was desperate to deliver their promise to play tough, and the unions played their chips well.

The history of government-legislated wage controls informs parties of all stripes. They fail, politically, because they serve as lightning rods of discontent for rallying workers, who foment about the deterioration of the legal right to bargain collectively.

Finance Minister Stan Struthers should spare Manitobans his vacuous tough talk. The government can make the legitimate case that times of restraint justify real concessions. This might result in some minimal wage increase, and may invite strike action. All of that, however, would save taxpayers the indefinite pain of paying for irresponsible deals that pad benefits and trigger future wages the likes of which private sector workers will never see.

Republished from the Winnipeg Free Press print edition February 6, 2012 A10