The McGuinty government's failure to impose wage freezes on unionized public-sector workers is putting municipal leaders on a collision course with their employees, potentially leading to labour strife across the province.
Dozens of Ontario municipalities are heading to the bargaining table this year with public-health nurses, transit workers, police and firefighters. With mayors in several cities, including Toronto, Windsor and London, pledging to freeze property taxes, they will be forced to either find savings elsewhere, shift spending from one area to another or, in the worst case scenario, cut services in order to pay for widely anticipated wage hikes.
Many contracts are expected to be settled through arbitration, a process that gives municipalities little control over the outcome even though they are on the hook for any increases.
"I refuse to increase taxes to pay for decisions that are made by arbitrators," said Windsor Mayor Eddie Francis. "There will be no money. That means we go back into our operations and we cut and we cut and we cut."
The pattern for public-sector wage increases has been set at the provincial level. Workers in hospitals, universities, long-term care homes and police services have all but ignored the government's call for a voluntary, two-year wage freeze. They have won annual pay increases averaging 1.6 per cent over those two years, according to a Globe and Mail review of 23 contract settlements.
The fallout from the government's reluctance to impose a freeze through legislation is now spreading to the province's towns and cities, where there are already signs of labour tension. Police in Windsor have been without a contract for more than a year and are heading into arbitration. Public-health nurses in Thunder Bay are on the verge of striking. And transit employees in Toronto face losing the right to strike as the province moves toward declaring their work an essential service.
Labour costs, including salaries and benefits, typically account for 60-to-80 per cent of a city's operating budget. Mayors are bracing for a wave of "me-too" bargaining as half of Ontario's 58 municipal police forces negotiate new contracts this year, along with registered nurses in 14 of the 31 public-health units represented by the Ontario Nurses Association.
Several municipal leaders said the fact that Premier Dalton McGuinty did not force unionized workers to take a wage freeze will make negotiations difficult for them.
"The McGuinty government has set up conflict throughout the province between municipalities and their bargaining units," said Sarnia Mayor Mike Bradley. "If they wanted a true wage freeze across this province, they had the ability to legislate that."
The Premier tried to lead by example by freezing the pay of MPPs and non-unionized public-sector workers for two years. Toronto city councillors adopted a similar restraint tactic on Tuesday by freezing their own wages this year.
In the absence of a freeze on unionized workers, mayors are calling on the McGuinty government to change the arbitration rules, which they say are tilted in favour of workers. In numerous settlements last year, they said, arbitrators paid no more than lip service to an employer's ability to afford higher wages.
"The arbitrators have a tendency to give away the farm," Mr. Francis said.
Alok Mukherjee, chairman of the Toronto Police Services Board, said the push by large police forces to be the province's best paid is driving up wages.
"There's been a pattern of leapfrogging," he said.
The police board recently approved the city's police budget for this year, but it does not include money for wage increases. The contract for Toronto Police expired Dec. 31.
The deal the province recently reached with the Ontario Provincial Police is widely expected to set the tone for negotiations. The contract includes a 5.075-per-cent increase in the first year, followed by a two-year freeze and a guarantee that the OPP will be the highest paid force in Ontario.
Mike McCormack, president of the Toronto Police Association, said compensation for his members should reflect the demands of working in such a large, ethnically diverse city.
"We're acutely aware of the economic times we're in," he said, "but all we're looking for is fair compensation."