The provincial government is taking a new tack on public-sector wage increases, and it doesn鈥檛 include the number 鈥渮ero.鈥� After years of sharing the pain of the B.C. Liberals鈥� 鈥渘et-zero鈥� and 鈥渃o-operative gains鈥� mandates, public servants heard new language from Finance Minister Mike de Jong this week 鈥� a novel approach called 鈥渆conomic-growth sharing.鈥�
It鈥檚 a first for B.C., and it鈥檚 an experiment other governments should watch closely.
The new approach is part of a tentative agreement the province has reached with the Health Services Association. The association鈥檚 17,000 members, who include physiotherapists, laboratory technologists, imaging technologists and others, have been offered an increase of 5.5 per cent over five years.
It鈥檚 not a big raise, but it comes with two sweeteners. First, a 鈥渕e-too鈥� clause says that if comparable public-sector unions get bigger increases, the health workers will be topped up to the higher level.
Second is 鈥渆conomic-growth sharing,鈥� officially known as the Economic Stability Dividend. If the province鈥檚 gross domestic product grows more than is forecast, the workers would get an additional increase.
For years, provincial employees鈥� wages were frozen. The net-zero mandate required that any increases be compensated by cuts in other parts of a collective agreement. Co-operative gains meant that raises had to be funded by savings in other parts of an agency budget. Since the economic meltdown of 2008, the government has struggled with reduced revenues to fund pay increases.
Despite those restrictions, workers have seen some wage increases. The HSA told its members that since 2001, their minimum total increase has been 24.65 per cent, while the cost of living has risen 20.57 per cent. Some members of the association have seen their pay go up 48.85 per cent, it said.
Under the growth-sharing plan, workers would be eligible for a slice of the pie if the provincial economy improves more than expected, but would not be penalized if the GDP performs below expectations.
To arrive at a figure for each year of the contract, the finance minister would start with the growth forecast that is included in the provincial budget every February. The forecast is created by the Economic Forecast Council, a group of economists and other experts appointed under the Budget Transparency and Accountability Act.
In November of the following year, Statistics Canada produces its official report on GDP. If the real growth exceeds the forecast growth, union members are in line for an increase of 50 per cent of the difference in the next year of their contract. So if the economy grew at three per cent instead of two per cent, workers would get an increase of .5 per cent.
For example, in February of 2015, the forecast for 2015 would be published. In November 2016, Statistics Canada would release the real GDP figures for 2015. If the increase was greater than expected, union members would get a boost in their 2016-17 pay.
Across the unionized public service, a one per cent pay increase costs $200 million.
The plan gives provincial employees a visible stake in B.C.鈥檚 economic development. For a government like Premier Christy Clark鈥檚, it鈥檚 a natural fit.
It鈥檚 debatable how much influence public servants have on the province鈥檚 growth. An X-ray technician or physiotherapist might have little impact. Someone working in the forests or energy ministries might have more.
But the stability dividend reinforces the idea that we are all in this together, all part of an interconnected economy.
