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Tough bargaining ahead as B.C. public sector contracts expire amid surging inflation

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WATCH: Growing concerns that the current spike in inflation won't be going away anytime soon. As Ted Chernecki reports, that comes as several major labour union contracts come up for re-negotiation. – Mar 23, 2022

Contracts are expiring soon for some of British Columbia’s largest unions, and amid the spectre of a period of prolonged high inflation, a period of difficult bargaining lies ahead.

On Friday, B.C.’s Hospital Employees Union released a survey of members which revealed one in three were considering quitting in the next two years. Among those who aren’t, a significant pay raise to counter the rising cost of living was a major issue.

Read more: B.C.’s biggest public-sector unions team up to push province for higher pay

Hospital workers aren’t alone. There are 184 public sector contracts, covering more than 393,000 workers, up for renewal — most of them expiring on March 31.

The BCGEU, which represents about 80,000 members in a number of professions, many in the public sector, is currently negotiating six contracts, and president Stephanie Smith says a cost of living adjustment is the driving issue.

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“That talks about the rising price of things that people need to purchase or need to do on a daily basis,” Smith said.

“Things have gotten extremely expensive recently.”

Click to play video: 'B.C. public sector contracts due for renewal' B.C. public sector contracts due for renewal
B.C. public sector contracts due for renewal – Mar 23, 2022

The numbers are not insignificant. Statistics Canada’s latest consumer price index report found February inflation of 5.7 per cent year-over-year nationally, and of 4.7 per cent in B.C.

And that measure doesn’t tell the whole story, as British Columbians can avoid buying some types of goods and services included in the index, while others are necessary.

“That’s what makes it difficult, because those items are inelastic in demand. I’ve still got to get food, I’ve still got to live somewhere, and I’m going to travel somehow,” financial analyst Michael Campbell explained.

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Read more: 1 in 3 B.C. health-care workers say they want to quit in next 2 years

“That’s what makes it problematic and those numbers are much higher than the sort of average inflation number we’re getting from Stats Can.”

In fact, B.C.’s inflation rate for transportation in February was 8.7 per cent, while the cost of food was up 6.7 per cent and shelter 6.6 per cent.

The price to purchase or insure a home in B.C. also continues to skyrocket, and rents at unit turnover in Vancouver were up by double digits last year according to at least one report.

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Smith said finding some kind of accommodation on working those increases in cost of living into a new collective impact will play a “big factor” on whether members will vote to support any proposal.

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With B.C. already in a labour shortage and the province estimating as many as a million jobs will need to be filled in British Columbia in the coming decade, she said wages will need to be attractive to find the workers.

“To be competitive, to ensure that people are willing to come to B.C. and take those jobs, we need to be competitive with those wages,” she said.

“There are other factors of course. Occupational health and safety issues, mental health issues, burnout, how do we address recruitment and retention?”

Read more: ‘This needs to end’: Whistler, B.C. mayor calls for solution as transit strike drags on

With employees’ finances already stretched thin, Smith argued a boost in wages will boost the local economy as workers become able to spend a little more on things they have been putting off.

But the sheer size of the numbers involved virtually guarantees getting to an agreement won’t be easy.

“It’s very expensive all of a sudden to say here’s your 5.7-per cent inflation increase. How is that going to be paid? If it’s the taxpayer that will add to the deficit or taxation,” Campbell said.

“Obviously in a private company they didn’t allow for that level. Every company I’m sure had some factor of saying you know what, we’re going to have to pay three per cent more. I doubt many went five of 5.5 per cent more.”

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Adding to the puzzle, British Columbia’s already pandemic-challenged provincial finances.

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A surge in housing prices helped the province rebound faster than expected from COVID-19, delivering a relatively modest deficit of $483 million last year — billions lower than expected.

But that bump is expected to be short lived, and the province has forecast deficits of nearly $5.5 billion for 2022/2023 and $4.2 billion the next year.

A three-per cent annual pay bump over three years, applied to all the contracts up for renewal, would cost the province about $5.6 billion, while a five per cent pay hike over the same period would cost around $9.3 billion.

It is a recipe for a potentially bumpy ride, but Smith downplayed the possibility of job action in the near-term.

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“We’re taking the necessary steps right now to get ourselves prepared for either outcome,” she said.

“Obviously, like anyone, our goal is to get a collective agreement, it’s not to go on strike. However, our members are committed. We know other labour unions are.”

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