Ontario Premier Kathleen Wynne and her Education Minister like to play good cop, good cop.
The guidance counselor cum Premier concedes that the province’s teachers are “still really annoyed” after her predecessor legislated contract terms. But she feels their pain. “We’ve set out to fix the process and repair the relationship,” the Premier told the elementary teachers’ union last week, before adding there’s no money for raises when current contracts expire on Aug. 31.
That’s where Liz Sandals came in. Despite a $12.5-billion provincial deficit, there could be raises, the Education Minister said, if she can find savings elsewhere in the education budget.
With this duo holding the purse strings, you’d think the teachers – who can earn around $95,000 after 10 years, work an average of 26 and draw full pensions for 30 more – would be all smiles. Instead, they’re still steamed that Ms. Wynne’s predecessor ended, not retroactively mind you, the perk that allowed teachers to pocket six months salary for unused sick days on retirement.
“The government basically stole $10,000 out of my pocket,” one angry teacher shouted at the Premier, who faced placards reading “You took away my rights” and “250 Sick Days Stolen.”
As galling as their sense of entitlement seems, the teachers’ frustration is almost understandable given the free ride their counterparts in the electricity sector have enjoyed. The power workers’ ability to squeeze taxpayers makes the teachers look like amateurs.
The province’s auditor-general has already flagged the out-of-control compensation at Ontario Power Generation, the provincially owned utility. Almost two-thirds of OPG employees, about 8,000 people, earned more than $100,000 in 2012. It takes 238 pages just to list all of the over-100K earners at OPG and Hydro One, the Crown-owned power transmission company.
Salaries tell only part of the story, however. As a newly released report on the OPG and Hydro One retirement plans shows, these employers (and ultimately Ontario electricity consumers) pay an additional 24 per cent and 27 per cent, respectively, of payroll expenditures to cover pensions. In 2012, for every $1 contributed toward their pensions by employees, OPG put in $3, while Hydro One put in $4. (Hydro One is moving to a roughly 3-to-1 contribution ratio.)
The plans, the report says, are “generous, expensive and inflexible.” Workers can retire in their early fifties, collecting full pensions and additional “bridging” benefits until they are old enough to draw Canada Pension Plan and Old Age Security cheques. Of the $585-million paid in 2012 into the OPG and Hydro One funds, as well as two much smaller electricity sector retirement plans, $480-million was contributed by employers.
These plans are unsustainable and inequitable. Taxpayers bear all of the risk. But Ms. Wynne, whose government quietly posted the five-month-old report on the eve of a long weekend, seems strangely nonchalant about it all.
“You know, we’re looking at it,” she said of the report, while insisting “there was no plot” to withhold the document until after the June 12 provincial election.
Contrast her sheepishness with the bull-by-the-horns approach taken by Quebec’s Philippe Couillard. Less than two months after his April election as Premier, his government tabled legislation to tackle the almost $4-billion deficit facing municipal sector pension plans. This means taking on the powerful police and firefighter unions, which have staged loud protests and, bizarrely, worn skirts to work to show their defiance.
But while he’s open to amending the bill, on which the government will hold hearings this week, the Premier insists the objective of 50-50 cost-sharing between employees and employers is non-negotiable. Active employees will be required to bear half the cost of funding their future pensions, and pick up half the tab for eliminating existing deficits. Retirees will see cost-of-living increases suspended.
The bill, which gives municipalities and their unions until mid-2016 to implement the changes, also caps police and firefighter pension costs at 20 per cent of payroll. All other municipal employees will see pension costs capped at 18 per cent of payroll.
“We do not have the right to bend,” Mr. Couillard said last week, noting that the number of working-age Quebeckers will decline this year for the first time. “We no longer see the wall, because we’re in it.”
For Mr. Couillard, the hardest part is to come as the union movement mulls a general strike. He may yet back down. But he’s already made his Ontario counterpart look negligent in comparison.