Budget ‘on track’ as negotiations with federal unions enter critical stage

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Treasury Board President Tony Clement says negotiations with federal unions are entering a "very critical" round as both sides prepare to meet against a backdrop of falling oil prices, a looming election and Conservative promises of a balanced budget.

Ottawa's labour negotiations are shaping up to be a key file to watch early in the new year and the Minister says he's pushing for a deal that is good for public servants and Ottawa's bottom line.

At an annual cost of nearly $40-billion, federal spending on personnel is a major expense. Key meetings are scheduled for later this month related to dozens of collective bargaining agreements that have already expired.

Prime Minister Stephen Harper and Finance Minister Joe Oliver have recently made definitive promises that Ottawa's budget will return to balance in 2015, but some economists question how they can be so sure in light of the revenue hit that will result from the recent steep drop in oil prices.

As president of the Treasury Board, Mr. Clement is in charge of the day-to-day spending decisions that will ultimately impact whether the target is achieved.

"I think that we continue to be on track. The Prime Minister has made that clear as well as the Finance Minister, but one doesn't declare 'mission accomplished' until you accomplish the mission," Mr. Clement said.

"I'm in the midst of a very critical round of negotiations with the public-sector unions. I've got 17 bargaining agents and 27 collective bargaining agreements that are up for negotiation and that will help us set the right course – the fiscally accountable course for the future," he said.

Mr. Clement indicated that in spite of the changing economic landscape there is no need to take additional spending restraint measures beyond those already announced.

As for labour negotiations, the relationship between the Conservative government and federal unions is clearly strained. In 2012, the largest union – the Public Service Alliance of Canada – distributed buttons to its members that said "Stephen Harper hates me."

The normally more reserved union of white-collar public servants – the Professional Institute of the Public Service of Canada – is making plans to run ads against the government in the runup to the scheduled October federal election. The president of PIPSC, Debi Daviau, has said the Conservatives are probably the "worst employer we've had to deal with" since the union was formed in 1967.

Mr. Clement put forward a major change to sick leave in the public service as a central government request, but unions have strongly rejected the idea as a "draconian" proposal that would force staff to come to work when they are sick. The government originally proposed replacing the current maximum of 15 paid sick days with a five-day maximum before workers transition to a privately managed short-term disability arrangement. In November, Mr. Clement offered to raise the maximum to six days, but that, too, was rejected.

The size of the public service has shrunk from 282,980 full-time staff in 2010 to 257,138 in 2014. However, current levels are still above what they were in 2006 when there were 249,932 employees.

Unions say working conditions and addressing the consequences of spending cuts in areas such as science are among their key demands.

Labour leaders are bracing for the possibility that a contract standoff could grow into an election issue.

Mr. Clement insists that's not the plan. In the interview, the Minister avoided heated rhetoric and stressed the importance of finding a deal through negotiation. He also declined to speculate on whether the government would legislate a settlement. The Minister said he would defend the sick-leave proposal in an election if necessary, but that would not be his preferred choice.

"I believe [the sick-leave proposal]'s better for the employees but also more accountable for the taxpayers, so I'd be happy to have that conversation at the appropriate time," he said. "But I'd be happier still to have an agreement that is reached in full and fair collective bargaining."