Ready to take on pensions
Premier Kathy Dunderdale managed to settle contract talks with the province’s largest public-service union Tuesday, and it looks like she’s poised to make changes to the public-sector pension plans — effectively addressing two of the biggest outstanding issues on the government’s fiscal agenda.
© Joe Gibbons
Premier Kathy Dunderdale
Tuesday morning, the government announced a tentative deal has been reached with the Newfoundland Association of Public and Private Employees (NAPE), the province’s largest public-sector union. If members ratify the deal, they’ll get a five per cent raise over the life of the four-year contract.
During the first two years, the deal calls for zero per cent wage increases; in Year 3, a two per cent increase and in the final year of the contract, a three per cent pay bump. On top of that, full-time employees will get a $1,400 signing bonus, and temporary, seasonal and part-time workers will get a pro-rated bonus.
Dunderdale said she values the work of public servants, but the freeze on wage increases in the first two years of the contract reflect the fact the province is running a budget deficit.
“As the fiscal situation in the province improves, so do benefits,” Dunderdale said. “We think given where we are, given the raises that took place in our last round of negotiations, that this is a good deal for our public servants and a good deal for the people of the province.”
With the NAPE negotiations concluded, Dunderdale said the government is ready to make changes to the public-sector pensions.
“We’re going to talk more a little later this week about our pensions and the unfunded liability and approaches we might be taking,” Dunderdale told reporters cryptically Tuesday. “So stay tuned on that one. We’ll have more to say on that one in the days ahead.”
The unfunded liability is the biggest chunk of the province’s net debt, and while government efforts to pay down direct debt, the pension liability keeps going up.
But if the government is getting ready to make a move to fix the pensions, it’s news to NAPE president Carol Furlong. She said no deal on pensions was part of the negotiations they just wrapped up.
“We did not negotiate pensions,” she said.
New Democrat Leader Lorraine Michael didn’t want to weigh in on the NAPE contract deal — she said that’s between the union and the employer — but she said she’ll keep a close eye on the pension issues for any attack on the defined benefit pension plans.
“I think it’s essential that we keep it and stand fully behind the unions in that,” Michael said. “We’re going to be watching very carefully and closely.”
Liberal finance critic Dwight Ball said he was surprised to see an agreement so quickly. It was only about a week ago that the current round of negotiation started, after months of stalemate between the two sides.
“I guess like most people, we were surprised that they were able to reach an agreement as quickly as this, given that they really just reconvened this week,” he said. “Obviously NAPE seems to be happy with the deal, and I’m sure that government is very happy with getting this off their agenda.”
Furlong said there were meetings with Finance Minister Jerome Kennedy over the summer that kickstarted things again, and union members really wanted the situation resolved.
“We're glad to have this over with,” she said. “I know all the members I’ve been talking to over the last little while were anxious to have a collective agreement.”