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B.C. to offer public-sector wage hikes tied to economic growth

The B.C. government says it will head into the next flurry of public-sector labour negotiations with an offer of limited wage hikes and a plan to link employee raises to the province’s economic growth.
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B.C. Finance Minister Mike de Jong.

The B.C. government says it will head into the next flurry of public-sector labour negotiations with an offer of limited wage hikes and a plan to link employee raises to the province’s economic growth.

The “growth sharing” framework for contract talks in 2014 replaces the co-operative gains and net-zero mandates that the government used in recent years to ink public-sector deals.

Finance Minister Mike de Jong said the government already has a tentative deal with the Health Sciences Association using the framework.

That agreement, which has yet to be ratified by the 10,000 HSA members, offers a total wage increase of 5.5 per cent over five years, as well as three years in which extra compensation could be given to workers if the province’s gross domestic product outperforms forecasts.

“The general wage increase in that agreement is modest,” de Jong said. “But there is a dimension to that proposed agreement … that is fairly novel. That’s the notion of economic growth sharing.”

If the economy grew at a rate greater than predicted, then workers would see their salaries increased at half that extra growth rate, he said.

For example, the government’s economic forecast council predicts B.C.’s economy will grow at 2.4 per cent in 2014. Under a new labour deal, if the economy grew at 3.4 per cent, then unionized workers would get a wage hike of half the difference, or 0.5 per cent.

De Jong said it’s important for the public sector to team with the government to encourage economic growth. The idea has never been tried in B.C. before, he said.

The government has struggled to negotiate labour deals since the 2008 recession, with limited money available for wage hikes in deficit budgets. It insisted wage increases could happen only if savings were found elsewhere in collective agreements.

Most public-sector contracts, including those covering core government workers, come up for renewal in 2014.

Each percentage increase in salary for the 302,000 unionized public sector workers in B.C. costs the government $200 million, de Jong said. “I’m trying to be candid about the limited means at our disposal for locked-in general wage increases.”

“If collectively we can do better, then government is saying we want to share the benefits of that growth with the people that helped get us there.”

The HSA held an information meeting on the deal in Victoria on Wednesday evening.

Union president Val Avery said the economy revenue sharing wasn’t a big deal for her members, and was a government proposal simply accepted as a good-faith gesture by the union. It’s unlikely to bring any real wage increases, Avery said.

The HSA contract ratification should be complete in late December or early January, she said.

The B.C. Government and Services Employees’ Union is recommending HSA members vote against the deal, in part because the growth-sharing formula would produce only a small increase and also because of an unrelated change to dental and life insurance.

Opposition NDP finance critic Mike Farnworth said workers are going to be skeptical about linking their wages to the Liberal government’s mismanagement of the economy.

rshaw@timescolonist.com