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B.C.: Net Zero Only Way to Hold the Line

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The stroke of midnight on New Year's Eve is usually a cause for celebration. This year, the bell tolls ominously for property taxpayers across British Columbia.

At least two dozen CUPE contracts expire on December 31, 2011, affecting thousands of municipal workers from Squamish to Saanich, from Vernon to Vancouver. CUPE is coming for another series of raises and with Vancouver, Richmond, Surrey, Burnaby, and other communities now out of the Metro Vancouver Labour Relations Board, municipalities have never been more splintered in their negotiations. This is not going to end well for taxpayers.

The provincial government has a solution, but it's unlikely any municipal council in the province has the stomach for it: a net zero mandate, where there are no pay or benefit increases without correlating concessions or cost savings elsewhere in the contract.

The B.C. Government has been remarkably successful with net zero over the past two years, settling two-year, zero-increase deals with more than two-thirds of their unionized employees.

Back in 2007, when the last round of CUPE contracts was being negotiated, municipalities followed the provincial government's lead and paid dearly to ensure labour peace through the Olympics. Back then, the province was handing out big signing bonuses and nice raises; the pressure to ensure Olympic peace meant most municipalities ended up with a 17.5 per cent pay increase over five years. Vancouver workers got a $1,000 signing bonus on top of that raise.

The economy was still booming in 2007, so not much was made of the huge pay increases. But when the global economy tanked and B.C. was dragged into the muck with it, the province learned its lesson and went to net zero.

Despite following the provincial government's mandate in 2007, municipalities don't seem interested in net zero. Indeed, 11 CUPE bargaining units have already signed three-year deals with Victoria, Colwood, and other Island municipalities. Workers there will get two per cent pay increases each of the three years. Coming on the heels of 17.5 per cent raises during a brutal recession, it's too much.

Three major factors scuttle any chance of net zero coming to municipalities. First, CUPE is a massive donor to mayor and council campaigns. In the 2008 Lower Mainland council elections, CUPE donated more than $700,000 to various candidates -- plus distributed labour endorsements to various candidates and slates. The 2011 election disclosures aren't due until March, but you can bet CUPE was a major player again.

The second hurdle is a very practical and personal one. Whereas cabinet ministers generally interact only with non-unionized, senior staff day-to-day, there is no similar separation between councillors and municipal union employees. They see these people every day. Councillors are directly reliant on unionized municipal staff, making it personally difficult to take a hard line against pay raises.

Finally, mayors and councillors are petrified of a work stoppage and the political damage that can occur. When CUPE fought Vancouver in 2007 and managed to brand the stoppage as "Sam's Strike," they didn't just scuttle Mayor Sam Sullivan's political career, they sent a message to every other mayor: Don't mess with us.

Net zero would be a powerful model to bring to the municipal bargaining table. Unfortunately, with our current city hall dynamic, it's going to take serious political will and taxpayer support. Failure to do so will mean even more property tax dollars pulled from your pocket in 2012 and beyond.

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