1
Prospects for Industrial Relations
in the Broader Public Sector
John O’Grady
2
Four Questions:1. What are the underlying changes in economic
conditions and the fiscal situation of the Ontario government? Are they structural or cyclical?
3
Four Questions:1. What are the underlying changes in economic
conditions and the fiscal situation of the Ontario government? Are they structural or cyclical?
2. If those changes are structural, what are their likely implications for the employment environment in the Broader Public Sector?
4
Four Questions:1. What are the underlying changes in economic
conditions and the fiscal situation of the Ontario government? Are they structural or cyclical?
2. If those changes are structural, what are their likely implications for the employment environment in the Broader Public Sector?
3. Can the expected changes in the employment environment be addressed by the existing labour relations system?
5
Four Questions:1. What are the underlying changes in economic
conditions and the fiscal situation of the Ontario government? Are they structural or cyclical?
2. If those changes are structural, what are their likely implications for the employment environment in the Broader Public Sector?
3. Can those changes in the employment environment be addressed by the existing labour relations system?
4. If changes in the labour relations system are needed, what are the options?
6
Ontario Government: Fiscal Situation
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
Expenditures
Revenues
Sm
illio
ns
7
Ontario: Real GDP – Manufacturing, 1997-2011
19971999
20012003
20052007
20092011
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
Re
al G
DP
(C
ha
ine
d $
20
02
) -
$M
illio
ns
8
Ontario: Real GDP – Manufacturing,1997-2011
19971999
20012003
20052007
20092011
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
Re
al G
DP
(C
ha
ine
d $
20
02
) -
$M
illio
ns
9
19971998
19992000
20012002
20032004
20052006
20072008
20092010
2011$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$95,000
$100,000
$105,000
$0.600
$0.650
$0.700
$0.750
$0.800
$0.850
$0.900
$0.950
$1.000
$1.050
Re
al G
DP
(C
ha
ine
d $
20
02
) -
$M
illio
ns E
xc
ha
ng
e R
ate
: C$
/ US
$Ontario: Real GDP –Manufacturing C$ Exchange Rate,1997-2011
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Average Annual Increases in Government Spending: 2010-11 to 2017-18
Interest Program Total
Budget 7.9% 1.4% 2.0%
Drummond 7.1% 0.8% 1.4%
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Implications for the BPS Employment Environment
1. Employment reductions.
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Implications for the BPS Employment Environment
1. Employment reductions.
2. Increased public sector employer opposition to restrictions on redeployment rights of public sector managers (seniority, posting).
13
Implications for the BPS Employment Environment
1. Employment reductions.
2. Increased public sector employer opposition to restrictions on redeployment rights of public sector managers (seniority, posting).
3. Increased public sector employer resistance to open-ended pensions and liabilities.
14
Implications for the BPS Employment Environment
1. Employment reductions.
2. Increased public sector employer opposition to restrictions on redeployment rights of public sector managers (seniority, posting).
3. Increased public sector employer resistance to open-ended pensions and liabilities.
4. Increased public sector employer resistance to pattern-based wage determination.
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Implications for the BPS Employment Environment
1. Employment reductions.
2. Increased public sector employer opposition to restrictions on redeployment rights of public sector managers (seniority, posting).
3. Increased public sector employer resistance to open-ended pensions and liabilities.
4. Increased public sector employer resistance to pattern-based wage determination.
5. Increased attraction to contracting out and divestment and increased opposition to restrictions that impede these.
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Eras of Restraint
1975 – 1978: Wage and Price Controls
1981 – 1982: Public Sector Wage Controls (‘6 and 5’)
1993 – 1995: Social Contract
wage freeze / 12 ‘Rae Days’
1993-94: 2.3% cut
1994-95: 0.8% increase
1995 – 1999: Harris Cuts:
1996-97: 3.3% cut
1997-98: 0.3% increase
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Changes in the System
1. More centralized bargaining.
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Changes in the System
1. More centralized bargaining.
2. Addressing the self-referential bias of public sector arbitration.
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Changes in the System
1. More centralized bargaining.
2. Addressing the self-referential bias of public sector arbitration.
3. Limited liability for benefits and pensions.
20
Changes in the System
1. More centralized bargaining.
2. Addressing the self-referential bias of public sector arbitration.
3. Limited liability for benefits and pensions.
4. Integration of pension bargaining with wage bargaining.
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Changes in the System
1. More centralized bargaining.
2. Addressing the self-referential bias of public sector arbitration.
3. Limited liability for benefits and pensions.
4. Integration of pension bargaining with wage bargaining.
5. Greater flexibility on re-deployment (overriding seniority and posting)
6. Fewer impediments to contracting out and divesting.
22
Nominal GDP and Government Fiscal Position: 2001-2011
Average Annual Growth Rate
Nominal GDP 3.5%
Government Revenues 5.0%
Government Expenditures 6.7%