Buried deep in Bill C-4, the year's second massive, all-votes-in-one omnibus budget bill, is a proposal that deserves real consideration. It would significantly change the criteria for labour arbitrations in the federal public sector, with possible big consequences for both civil servants and taxpayers. It is an attempt to adapt – to the federal government – the sensible concept of the employer's ability to pay.
A government's ability to pay is at least in theory unlimited, thanks to its power to tax. In the real world, however, every government's purse is always constrained. The more it spends, including spending on paying its employees, the more revenue it will have to take in from taxpayers. Increases in public-sector pay need to bear some reasonable relation to the size of the whole economy, and to its growth and productivity.
The Public Service Labour Relations Act now says that an arbitrator, in deciding a labour dispute involving federal workers, has to consider the state of the economy and the federal government's fiscal circumstances, as one of five criteria – and that criterion is at the bottom of the list. The budget bill would set only two key criteria, along with some lesser factors, "if relevant." One of the two is "Canada's fiscal circumstances relative to its stated budgetary policies."
Economist Don Drummond, in his 2012 report to the Ontario government, similarly suggested ability-to-pay criteria that would include the "economic and fiscal environment, and productivity criteria." The principle has a compelling logic.
The government may have this argument right on the merits, but it is 100 per cent wrong on the parliamentary procedure. This change should be part of a stand-alone bill, which would go before a Commons committee, and then Parliament. Instead, the whole monstrously overstuffed budget legislation, an encyclopedia of bills that each deserve separate debate, will go to the finance committee. Its members aren't likely to find the time to pay much attention to any one part of the omnibus monster.