Dalton McGuinty’s attempted wage freeze is boiling over.
Public sector unions are seething. Opposition parties are frothing.
But the premier’s latest tensions with organized labour are only a foretaste of tougher times ahead for Ontario.
As McGuinty fights a rearguard battle against his former labour allies, he is quietly launching a frontal assault on his own $125-billion-a-year provincial government: Not just wage restraint, but reformation.
“Transformation” is McGuinty’s newest mantra. While the bitter public fight with labour takes centre stage, behind the scenes his brain trust is turning its mind to changing the way government operates — against the backdrop of a persistent $14.8-billion deficit.
The impetus came from a landmark report delivered six months ago by influential economist Don Drummond on how to reform government operations and fix its finances. The once-voluble Drummond is now keeping a low profile (he is sitting down privately with Finance Minister Dwight Duncan to take stock), but rumors of his report’s demise are surely premature.
In fact, Drummond set the stage for “transformation” as a two-step plan:
Part One is a “pause” in rapidly rising payroll costs to provide breathing room for the next step.
Part Two requires a reconfiguration of public services so that when wage freezes are lifted down the road, pent-up wage pressures won’t pick up where they left off.
The report provided economic cover to the McGuinty government to take action, without anticipating the political consequences in a minority Legislature where opposition parties are quick to pounce.
Since the Liberals took power in 2003, average public sector wages increased by 28 per cent compared to the provincial average of 24 per cent, while inflation was 17 per cent. With wages soaking up $55 billion a year, it is mathematically impossible to get a grip on public finances without focussing on public servants in the short term.
Drummond disparaged wage freezes as a crude tool, but acknowledged they may be an unavoidable first step. He recommended a “zero budget increase for wage costs” and cited the “challenge” of dealing with the two biggest cheques cut by government for 25,000 physicians and 200,000 teachers: “Temporary wage moderation may be necessary to meet short-term fiscal targets.”
Hence the government’s long, hot summer of tangling with teachers and duelling with doctors, culminating with a law imposing a restraint template on recalcitrant teachers’ unions. The government has proposed even more sweeping measures for hundreds of thousands of other public servants.
But a pause is not a panacea. Getting tough on labour is quick and easy for any government, compared to the heavier lifting and longer-term thinking required for politicians and bureaucrats to get tough on themselves.
Now, cells of senior officials are huddled in the bowels of the bureaucracy, poring over programs and deciphering spreadsheets, but with no dramatic early results.
Northern Ontario took a hit with the closure of uneconomic railway services, and cancelled subsidies for horse racing sparked hostility across rural Ontario. Higher education has been targeted for a shakeup, after the government set a Sept. 30 deadline for consultations. An “action plan” for health reforms had a slow start, but costs are coming down.
A “Realty Transformation Strategy” will reduce the government’s footprint by one million square feet in Toronto (equal to a 43-storey office tower), forcing ministries to pay market rent for office space rather than undervaluing it at subsidized rates as before.
None of these embryonic reforms are sexy or exciting in a world where politicians thrive on ribbon-cuttings and hospital openings. Closures and contracting out are not vote-winning strategies.
Ontario’s transformation is still gestating, but at least one of Drummond’s recommendations proved stillborn: He called for negotiated over legislated (imposed) settlements, because transformation requires collaboration.
That early dream is dead. To keep its reforms alive, the McGuinty government must now answer this question: How do you truly transform government when you’re not on speaking terms with the workers who get things done?
Original Article
Source: the star
Author: Martin Regg Cohn
Public sector unions are seething. Opposition parties are frothing.
But the premier’s latest tensions with organized labour are only a foretaste of tougher times ahead for Ontario.
As McGuinty fights a rearguard battle against his former labour allies, he is quietly launching a frontal assault on his own $125-billion-a-year provincial government: Not just wage restraint, but reformation.
“Transformation” is McGuinty’s newest mantra. While the bitter public fight with labour takes centre stage, behind the scenes his brain trust is turning its mind to changing the way government operates — against the backdrop of a persistent $14.8-billion deficit.
The impetus came from a landmark report delivered six months ago by influential economist Don Drummond on how to reform government operations and fix its finances. The once-voluble Drummond is now keeping a low profile (he is sitting down privately with Finance Minister Dwight Duncan to take stock), but rumors of his report’s demise are surely premature.
In fact, Drummond set the stage for “transformation” as a two-step plan:
Part One is a “pause” in rapidly rising payroll costs to provide breathing room for the next step.
Part Two requires a reconfiguration of public services so that when wage freezes are lifted down the road, pent-up wage pressures won’t pick up where they left off.
The report provided economic cover to the McGuinty government to take action, without anticipating the political consequences in a minority Legislature where opposition parties are quick to pounce.
Since the Liberals took power in 2003, average public sector wages increased by 28 per cent compared to the provincial average of 24 per cent, while inflation was 17 per cent. With wages soaking up $55 billion a year, it is mathematically impossible to get a grip on public finances without focussing on public servants in the short term.
Drummond disparaged wage freezes as a crude tool, but acknowledged they may be an unavoidable first step. He recommended a “zero budget increase for wage costs” and cited the “challenge” of dealing with the two biggest cheques cut by government for 25,000 physicians and 200,000 teachers: “Temporary wage moderation may be necessary to meet short-term fiscal targets.”
Hence the government’s long, hot summer of tangling with teachers and duelling with doctors, culminating with a law imposing a restraint template on recalcitrant teachers’ unions. The government has proposed even more sweeping measures for hundreds of thousands of other public servants.
But a pause is not a panacea. Getting tough on labour is quick and easy for any government, compared to the heavier lifting and longer-term thinking required for politicians and bureaucrats to get tough on themselves.
Now, cells of senior officials are huddled in the bowels of the bureaucracy, poring over programs and deciphering spreadsheets, but with no dramatic early results.
Northern Ontario took a hit with the closure of uneconomic railway services, and cancelled subsidies for horse racing sparked hostility across rural Ontario. Higher education has been targeted for a shakeup, after the government set a Sept. 30 deadline for consultations. An “action plan” for health reforms had a slow start, but costs are coming down.
A “Realty Transformation Strategy” will reduce the government’s footprint by one million square feet in Toronto (equal to a 43-storey office tower), forcing ministries to pay market rent for office space rather than undervaluing it at subsidized rates as before.
None of these embryonic reforms are sexy or exciting in a world where politicians thrive on ribbon-cuttings and hospital openings. Closures and contracting out are not vote-winning strategies.
Ontario’s transformation is still gestating, but at least one of Drummond’s recommendations proved stillborn: He called for negotiated over legislated (imposed) settlements, because transformation requires collaboration.
That early dream is dead. To keep its reforms alive, the McGuinty government must now answer this question: How do you truly transform government when you’re not on speaking terms with the workers who get things done?
Original Article
Source: the star
Author: Martin Regg Cohn
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