Finance Minister Chrystia Freeland announced the existing COVID-19 income support programs (LINK Government to spend $7.4B transitioning to new pandemic support programs: Freeland | Radio-Canada.ca ) scheduled to expire tomorrow will be extended until early May at a cost of $7.4-billion.
I recognize there are fellow Canadians who need support. But I suggest there are many programs within this global amount that may be far too rich and warrant review.
This is money we do not have. This is money that those who come behind will pay back.
As I write this post Canada’s Federal Debt of $1.165 trillion (LINK TO DEBT CLOCK CANADA) continues to grow by about $17.6 million per hour.
Consider: These funds are financed at historically low interest rates (currently in the 2 +% range). But what happens when interest rates return to historical averages of 5-6 %?
I will tell you. At 2 ½% amortized over 25 years for a term of 60 months, interest on this money will be $852 million. If interest rates go to 6%, interest will be $2,088,000,000. Almost a threefold increase in the interest portion of the loan payment. If payments stay the same, the corresponding portion of the principal loan repayment will be reduced by one third – it will take longer than 25 years to pay off!
What could a province do with the money? British Columbia receives Federal Support for the Health Transfer of $5.8 billion for the current year. Imagine what this province could do for healthcare with these funds.
Canadians who lived through 1980/81 will recognize the threat of interest rates rising. Indeed, for those that have them, consider your own mortgages and what in the near term possibly looms ahead.
Productivity in Canada is down, in part because workers receive these funds from an assortment of programs and therefore prefer to stay home. Yet jobs are plentiful — many of you daily witness restaurants, stores, small businesses reducing hours of operation, all desperate to find workers.
There will be little relief for business as long as government interferes in the marketplace.
Business has little choice but to pay higher wages. Increasingly labour unions, particularly those with ‘clout’ with the government, are lobbying for higher wages. Some of these unions have turned down 5% to 6% wage increases. Given that small businesses have been and continue to experience demands for higher wages, this will only compound their problem.
Yes this in turn leads to inflation… higher prices on your gas… rents (subsidies in the program)… food… and the list goes on.
Governments at all levels will feel the impact of inflation… and will attempt to raise taxes on property, sales, death, income and business. I can’t recall when government considered the other option– reduce the insatiable demand for funds.
Manitoba had the courage (LINK (1) Appeals court rules Manitoba had the right to impose wage freeze on public sector – Winnipeg | Globalnews.ca ) to impose wage freezes on the public sector in an attempt to hold the line. Some success – but I expect the Supreme Court will make the final ruling in this matter…. The Stare Decisis will impact Government negotiations with workers across Canada… see article below.
The take away from this article is the importance of the directing minds of all organizations to prune the rosebush. There are many initiatives in place that over time do not produce value for money when evaluated against new emerging initiatives. Our decision-makers must adopt a new mental model and test every expenditure.
Do you support continuing with these funding programs until May OR should some of them be reviewed and pruned back? Comments?
Appeals court rules Manitoba had the right to impose wage freeze on public sector
Posted October 13, 2021 4:52 pm
Updated October 13, 2021 8:32 pm
A court ruling that struck down the Manitoba government’s public-sector wage freeze as a violation of collective bargaining rights was overturned by a higher court Wednesday.
The provincial Court of Appeal ruled the government was within its rights to legislate the wage freeze. It said the original Court of Queen’s Bench judge erred in deciding the legislation violated bargaining rights under the Charter of Rights and Freedoms.
“While there can be no doubt that the imposition of wage restraint legislation … impacts or interferes with the collective bargaining process, the case law establishes that the type of legislative interference does not amount to ‘substantial interference’ when it is broad-based and for a limited period of time,” Chief Justice Richard Chartier wrote on behalf of the three-member appeals panel.
Moreover, the government removed only wages from the bargaining table, not any other issue, Chartier added.
1:18Province to introduce bills that may freeze public-sector wages
Province to introduce bills that may freeze public-sector wages – Mar 20, 2017
Public sector labour groups said they are considering an appeal to the Supreme Court of Canada.
“Unions believe in free and fair collective bargaining. It works, and we don’t think governments should be tipping the scales (and) dictating outcomes,” Kevin Rebeck, president of the Manitoba Federation of Labour, said on behalf of the unions representing some 120,000 civil servants, health-care workers, teachers and others.
The Progressive Conservative government introduced the wage-freeze bill in 2017 and said it was necessary to address growing annual deficits.
The bill called for any new public-sector collective agreement to start with a two-year wage freeze, followed by pay increases of 0.75 per cent in the third year and one per cent in the fourth.
The bill was passed by the legislature but never proclaimed into law, and the government held out the possibility of amending it. The unions said, however, that government negotiators acted as if the wage freeze was firmly in place.
A Court of Queen’s Bench judge last year called the bill “draconian”, ruled it invalid, and said the government should have tried to negotiate before resorting to legislation.
1:15Manitoba government proposes five unpaid days off for civil servants
Manitoba government proposes five unpaid days off for civil servants – May 19, 2020
The appeals court panel said that was an error.
“There is no legal prerequisite on governments to consult or negotiate prior to passing legislation,” Chartier wrote.
Finance Minister Scott Fielding welcomed the ruling. When asked whether the government might try to legislate more wage freezes in the future, he said the Tories prefer negotiations.
“We want to have groups at the bargaining table making decisions, that’s the most preferable approach.”
The government’s court victory was not complete.
The appeals court upheld a lower-court ruling that found the government violated collective bargaining rights during contract talks at the University of Manitoba in 2016.
1:47Coronavirus outbreak: Pallister defends work-reduction proposal
Coronavirus outbreak: Pallister defends work-reduction proposal – Apr 15, 2020
In that case, the university had already offered a seven per cent wage increase over four years when the government interrupted the process and ordered the university to seek a one-year wage freeze.
The trial judge did not commit any errors in finding those actions an infringement on the collective bargaining process, the appeals court ruled.
READ MORE: Manitoba government plans to appeal ruling that quashed wage freeze
Despite the wage-freeze bill, some groups have managed to secure higher salaries.
A recent tentative agreement with the Manitoba Nurses Union, retroactive to 2017, includes wage hikes totalling 9.6 per cent over seven years.
1:39University of Manitoba faculty union authorizes strike vote
University of Manitoba faculty union authorizes strike vote – Oct 7, 2021
© 2021 The Canadian Press
