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What we heard:
Ontario Finance Minister Dwight Duncan called unions and employers to a closed door “consultation” session on July 20, to announce the government’s intention to launch a series of “consultations” aimed at implementing its “zero-zero” two year public sector wage freeze.  

The meeting was attended by CUPE Ontario President Fred Hahn, CUPE Ontario First Vice-President and OCHU President Michael Hurley, and CUPE Ontario Acting Regional Director Linda Thurston-Neeley, along with leaders from the Ontario Federation of Labour (OFL), and many of the affected unions. 

This initial “consultation” session appeared to be the next step in the government’s previously announced plan to achieve two years of zero wage increases throughout the unionized and non-unionized public sector.  The Minister said there is no new legislation planned beyond the wage freeze law (Bill 16) affecting non-union workers that came into effect following the 2010 spring budget.

What was new yesterday was, firstly, a very pointed “request” by the government to employers and unions to suspend any current collective bargaining and/or interest arbitration that is scheduled or currently underway.  Duncan also said the government is exploring its options to “request” to arbitrators that any interest arbitration awards now pending be delayed.

The second piece of “new” information was the government’s announcement that it will begin directly contacting bargaining agents, sector by sector, starting in August, for the purpose of direct “consultations” about the wage freeze.  Although no formal schedule was announced, it was indicated privately that CUPE Ontario should expect to be contacted in early September. 

The government claims its single biggest line item in government spending is employee compensation at $50 billion annually.  This is why, they say, the government is seeking two years of zero wage increases across the public sector as necessary to eliminate the $19 billion provincial deficit and have a balanced budget by 2017-18.

What we said:
CUPE Ontario President Fred Hahn was crystal clear in responding to the wage freeze.

“CUPE Ontario wants what’s good for Ontario,” he said, “but if it slows down the economic recovery by inhibiting consumer spending, that’s not what anybody wants.  And that’s what freezing workers’ wages is going to do.

Hahn says Ontarians should judge the proposal on three counts:

• Will it help grow the economy?
• Will it protect public services?
• Is it fair?
The plan fails on three-out-of-three.

1) We are not living in a cave, and CUPE Ontario members recognize the serious economic challenges facing all of us.  But, while talking about a wage freeze might have an emotional appeal to some people, we believe freezing wages will only lead families to postpone spending decisions they might otherwise have made.  A new car, a new house, a new fridge and stove…and anything that leads families to put off these purchases is counterproductive to economic recovery, and that’s not what anybody wants.  (If the government were truly committed to reducing the deficit, they would reconsider their $4.6 billion giveaway in corporate tax cuts.)  

2) Now, more than ever, Ontario families need public services, and this plan does nothing to grow or protect those services.  In fact, government intrusion into the bargaining relationship between public sector unions and employers only gets in the way of their finding solutions that best fit the needs of each particular workplace and support the continued delivery of services in each community.  As we have shown in past periods of difficult economic conditions, CUPE is quite capable of negotiating settlements that work for all parties and keeping services coming to those who depend on them.

3) Is it fair to single out 11 per cent of the workforce—a majority of whom are low-end earners, women and single parents—and reach into their pockets, while leaving untouched the wealthiest Ontarians, including the bankers and Bay Street brokers who, unlike public sector or private sector workers, actually bear some responsibility for the financial crisis?  No.  It is patently unfair.  This move is less about helping the economy, and more about helping the McGuinty Liberal government look “Deficit Tough” so voters won’t leave them for Tim Hudak’s Conservatives in the October 2011 provincial election.

Fred Hahn said it yesterday, again and again.  CUPE Ontario wants what’s good for Ontario.   But, ideas like a wage freeze that slow down the economic recovery by inhibiting consumer spending, will hurt everyone.  That’s why this proposed wage freeze is a bad idea.

CUPE Ontario wants to focus on ideas that will build the economy and continue the modest growth that stimulus investments have already started to produce and find ways to protect and enhance the public services Ontarians are counting on in these difficult times.

Why doesn’t Minster Duncan rethink his $4 billion in corporate tax giveaways that brought no guaranteed economic development to Ontario?  If we must have corporate tax cuts, why not make them conditional on investment commitments, maybe with a regional focus, for example, to kick-start economic recovery in the north?

What we’ll do next:
What is CUPE Ontario’s next step on this issue? 

Consultation with CUPE Ontario members:   

CUPE Ontario will, in the coming days, consult with our leadership, with our five sector chairs and sector coordinators, our District Councils, our locals and our members. 
Before we can respond about sitting down for further talks with the government, before we do anything, we will consult with our members, make sure they know what is going on and have all the information they need, and we have to get a clear mandate on how to proceed.

• CUPE Ontario President Hahn has called a special CUPE Ontario Executive Board conference call to discuss these developments.
• CUPE Ontario sectors are organizing sector specific consultations and sector committees are reaching out to examine the implications of the government’s announcement.
• CUPE’s Acting Ontario Regional Director Linda Thurston-Neeley has lined up senior staff, researchers and coordinators for a special briefing.
• CUPE Ontario’s leaders are also staying in touch daily with CUPE National, and will continue to meet regularly with other Ontario unions affected by the wage freeze, and with the OFL.