Port Moody's sweetheart labour deal with CUPE is a bitter pill for taxpayers
For many of us that live in Metro Vancouver, the labour dispute that hit both Vancouver and North Vancouver in 2007 is only a memory, albeit a bitter one for many involved. The municipalities in Metro Vancouver were bargaining hard to keep wage settlements down (good foresight given what happened to our economy in following years), but in the end Richmond Mayor Malcolm Brodie broke ranks and signed a sweetheart deal with CUPE.
The collective agreement provided unions with over 17.5% in pay raises over five years, and a bunch of new benefits. Once Richmond folded, Vancouver and North Vancouver were essentially stuck with no option but to match Richmond's deal. These cities were "whipsawed" into submission.
One important detail often overlooked was that Port Moody actually became the first city in Metro Vancouver to sign a collective agreement in 2007 – agreed to before Richmond's deal. Port Moody's agreement was for approximately 39 months and would have provided their employees with 9.75% in pay increases. The signed agreement was set to expire last March – just at the end of the 2010 Games.
In theory, the management in Port Moody would by now have negotiated a new collective agreement with their employees. However, instead of trying to reach a new labour deal, Port Moody city council quietly chose to reward their employees with the same generous 17.5% deal provided by Richmond, Vancouver and other cities in the region.
You're probably wondering why the City of Port Moody would voluntarily dump a signed agreement that kept wage increases to around 10% over three years in favour of a costlier deal over five. We'd also like to know what Port Moody city council's logic was in making this deal.
The reality of doing labour deals in 2010 is altogether different than it was as the economy was peaking in 2007. About six months ago as CUPE employees sat across from City management demanding wage increases, they would have to face up to the new reality of a global economic downturn and dwindling tax revenue. Wage increases would be a tough sell.
As a comparison look what's recently happened in Victoria. Finance Minister Colin Hansen has signed two-year "net zero" agreements with both the BC Government Employees Union, as well as medical services unions. Due to current economic conditions, these BC public sector employees knew they were in no position to ask for wage increases. Contrast this with the City of Port Moody employees that will receive 4% this year and 4% next year under their new agreement.
CityCaucus.com contacted Gaetan Royer, City Manager for Port Moody to get his perspective on the issue. This no-nonsense civil servant pulls no punches when he states (our emphasis):
Thanks to Port Moody's exemplary labour relations and CUPE's cooperation, I negotiated a 39-month collective agreement that would have ended in March 2010. The agreement had a modest 0.25% wage increase on January 1st 2009. Our deal was approved by Council and ratified by Metro Vancouver well before the start of bargaining in other cities in the region.
Other cities initially attempted to negotiate similar agreements. For various reasons, a few cities agreed to a much richer five year agreements with 4% increases on January 1st 2010 and 2011. From that point, all other cities matched the 60 month settlement.
Our deal remained at 39 months and 9.5% overall until the last municipal agreement was concluded in that round of bargaining. Then the city of Port Moody voluntarily re-opened its own agreement to offer parity with other CUPE agreements in the region. The feeling was that our CUPE local should not be shortchanged for having shown such exemplary cooperation with its employer. Once we had lost the ability to influence settlements, parity with other CUPE locals was seen as more important.
One can easily conclude that if the region had followed the Port Moody model, all municipalities would be bargaining in a very different context today. It is highly unlikely that any employer would offer 4% per year increases in the current economic climate. At this time, 80% of the public sector agreements are being settled at or near net zero. In this context, a 39 month 9.5% agreement looks a lot more fiscally responsible than the 60 month 17.5% agreement we have today.
Talk about not mincing words. Now there is a City Manager who is looking after the needs of taxpayers, while maintaining respectful relations with his unionized workers at the same time. Royer's note clearly shows that by voluntarily re-opening the agreement, the taxpayers in Port Moody were immediately on the hook for increased labour costs.
Is this an example of the union exerting their influence on elected officials? A quick review of the CUPE candidate list we first reported on a while ago indicates that Mayor Joe Trasolini as well as councillors Bob Elliot, Karen Rockwell and Meghan Lathi were all endorsed by the civic union. What influence this had we cannot accurately surmise.
So how much did voluntarily re-opening their collective agreement cost Port Moody taxpayers? We posed this question to the City Manager, and here is how Mr. Royer responds:
The collective agreement required to be modified to 1) add the two annual increases and 2) extend the term. This was done by mutual agreement between CUPE Local 825 and the city. Final approval of the amendment required:
- Resolution by Port Moody Council
- Vote by CUPE Local 825 membership
- Port Moody being a member of the Metro Vancouver Labour Relations Bureau, ratification by the Bureau was also required
The additional 4% per year for two years adds up to approximately $450,000 (Jan 1st 2010 to Dec 31st 2011). For Port Moody, this translates into a 2% property tax increase.
Some qualifications regarding the cost difference. There is no guarantee that a net 0% agreement with municipal unions could be reached in the region even though this is what provincial unions settled for. What I said is that it is highly unlikely that settlements would reach the 4% mark in the context of an economy that is emerging from a recession.
Kudos to Mr. Royer, who unlike senior officials in Vancouver that obfuscate, hide behind privacy legislation or simply don't respond to emails, was open and honest about the impact of re-opening this collective agreement had on Port Moody taxpayers. It's refreshing to know that some cities still have professional and non-partisan public servants that you can rely upon to give you responses to simple and basic questions.
As for other cities such as Vancouver, the prospects are grim. CUPE-backed city councillor Geoff Meggs recently moved a motion asking that Vancouver be removed from the Metro Vancouver Regional Labour Relations Bureau. The Bureau negotiates collective agreements on behalf of a number of municipalities to prevent what is known as the "whipsaw effect". That's when one municipality signs a collective agreement, followed by another that considers the previous deal the new base to work from. In the end, taxpayers end up paying for this out of control and undisciplined process for negotiating collective agreements.
What has quietly happened in Port Moody is merely a sign of things to come in 2012, and beyond. Once these five-year deals end, you can expect CUPE's well-oiled machine to pick off one municipality at a time until they get their ultimate sweetheart deal.
It may not make for headline news in between collective agreements, but it would appear that while other levels of government and their employees are living within their means, civic unions are getting ready to negotiate even higher pay settlements starting next year.
- post by Mike