Chart - Wage and Price Increases

Public sector wages not on pace with inflation

Governments in Nova Scotia, Newfoundland and Labrador, Manitoba, and Saskatchewan are now either imposing or pushing wage freezes and/or cuts on public sector workers in their provinces. Over the past seven years, base wage increases in collective agreements for public sector workers across Canada averaged just 1.4% year, while consumer price inflation increased by an average of 1.7% annually. Nationally, this adds up to a real wage decline of more than 2% since 2009. In Nova Scotia, the loss of wages and retirement income is distressing. Here is the economic impact of one year of a four-year collective agreement imposed on public sector workers by the Liberal government. $322 million lower GDP in the fourth year Equal to almost 0.7% (almost a full percentage point lower GDP) 1,500 non-government jobs lost in the fourth year Mostly private sector jobs lost from indirect and induced impacts of lower spending by public sector … Read more…

A tale of two budgets – Alberta and Saskatchewan

There is no better example of budgets being about political choices than a comparison of the Alberta and Saskatchewan budgets. Alberta’s budget invested in infrastructure and public services while Saskatchewan went with cuts and tax hikes for everyone except corporations (who got a tax break). Alberta’s reliance on revenue from oil and gas has had a ‘boom and bust’ effect on government revenue for decades. When oil and gas prices were high, the province racked up huge surpluses, and when prices dropped, deficits appeared. During the 44-year reign of the Alberta Conservatives, the approach to low resource prices was to slash public services and raise user fees and taxes. The Ralph Klein government cut public sector wages by five per cent, laid off public sector workers and privatized public work, and cut funding to health care and education. Health care premiums were hiked, alcohol taxes raised, and Albertans faced a wide range … Read more…

False fiscal crises undermine the public sector

The deficit made me do it. It’s becoming a distressingly predictable excuse. A new (or old) government suddenly finds a larger-than-anticipated deficit, claims it’s facing a fiscal crisis and uses this as cover to freeze or slash wages, demand concessions and two-tier contracts, lay off workers, cut public services and privatize. We’ve seen this show many times across the country, with devastating consequences. Wage freezes, layoffs and public spending cuts don’t just hurt workers and people who rely on public services – they also slow down economic and income growth, which squeezes government revenues. Economic models show cuts to public spending are worse for the economy and jobs than tax increases. In almost all cases where governments claim they’re in a fiscal crisis, they don’t have a spending problem, they have a revenue shortfall. Over time, these governments could balance their budgets by allowing the economy to grow, and reversing tax cuts … Read more…