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Picketers march on Parliament Hill as approximately 155,000 public sector union workers with the Public Service Alliance of Canada (PSAC) continue to strike, in Ottawa, Ontario, Canada April 26, 2023. REUTERS/Blair GableBLAIR GABLE/Reuters

Canadians needing a passport for a vacation are out of luck. Farmers are worried about exporting their grain. And ports in Vancouver and Montreal have been slowed.

The pain from the national strike by federal public servants is escalating from irritation to significant disruption as the labour dispute grinds on through a second week, with no sign that the two sides are close to a compromise.

But one group is likely to be insulated from any major hardship: the striking workers themselves. A combination of rickety payroll technology, bureaucratic inflexibility and clumsy bargaining by the government means that many – perhaps most – of the 100,000 or so striking workers will still receive their regular pay in two weeks.

Those who show up for picket duty will also pocket tax-free strike pay and end up with extra cash in their pocket, at least in the short run.

Labour disputes are contests of will; whichever side feels the most pain will generally give ground first. It is become increasingly clear that the government has handed the Public Service Alliance of Canada the edge in this contest, since it failed to take the basic step of ensuring that workers on strike do not receive their regular pay.

As The Globe reported on Wednesday, the government can’t say how many strikers will continue to receive their regular pay. Some may have their pay docked. It’s also not clear when the government would take the minimal step of clawing back overpayments. And there is the possibility – bordering on likelihood – of PSAC demanding as part of a contract deal that there be no clawbacks at all.

It beggars the imagination that the federal government did not have a contingency plan to prevent its striking workers from continuing to be paid once they walked off the job.

Treasury Board officials said last week that there would be just one errant paycheque, and that any funds would be clawed back within a couple of weeks. But PSAC now says it believes that striking workers will receive their regular pay however long the dispute lasts.

At least part of this mess stems from the government’s fumbling in advance of the strike, when it failed to get the union to agree to designate payroll workers at the Canada Revenue Agency as essential. (It did secure that agreement for the payroll workers in the core civil service.)

The head of the union for striking CRA workers says he believes it’s not possible for managers at the agency to adjust payrolls on their own, and that his members will receive full paycheques for the duration of the labour dispute.

The government’s response has been exceedingly vague, but two things are clear. First, the federal government has failed at minimally prudent planning to a degree that would guarantee a pink slip for any similarly inept manager in the private sector. Worse, striking public servants have little motivation to move away from demands that are unattainable for most Canadians, and which will widen the gap between the private sector and an increasingly cosseted public service.

Let’s start with pay demands. The union representing Canada Revenue Agency workers is pushing for a 33-per-cent pay increase over three years. That is a breathtaking demand.

PSAC’s position for the core federal civil service is more modest; on Wednesday, the union said it had moved away from its demand of a mere 4.5 per cent a year for three years. Anything close to that figure, however, would outstrip wage increases in the overall Canadian economy in 2021 and 2022.

Of course, those wage demands will be layered on top of benefits that are out of reach for most in the private sector, most notably defined-benefit pensions protected from inflation. A recent study by the Fraser Institute points out that 86.6 per cent of public-sector workers (federal, provincial and municipal) had registered pension plans as of Jan. 1, 2021, versus just 22.9 per cent of workers in the private sector.

That study also found that public-sector workers at all three levels of government enjoyed a 5-per-cent wage premium, had greater job security and retired nearly 2½ years earlier than their private-sector counterparts.

Given all of those advantages, it is far from unreasonable for the government to push for its workers to share in the economic pain of Canadians rather than to further plump their positions. Unfortunately for taxpayers, the government’s self-defeating actions have undermined its ability to arrive at a fair and speedy resolution.

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