Halifax – The Nova Scotia government’s decision to legislate wage patterns in the public sector is the kind of fiscally responsible decision needed to address the province’s financial reality, says the Atlantic Institute for Market Studies (AIMS).

While it is to some extent understandable that several trade unions in Nova Scotia find the government’s decision to table legislation under Bill 148 disappointing, AIMS president and CEO, Marco Navarro-Genie, hopes they will see the legislation for what it is: an attempt to restore a measure of stability in an otherwise unstable economic climate.

Last week, Nova Scotia Finance Minister, Randy Delorey, announced in his fiscal update that a forecasted deficit has jumped up $118.6 million since September to $241.1 million.

“This is the kind of reality we face,” says Navarro-Genie. “While revenues plummet due to world oil price destabilization, less demand for Nova Scotia products, stagnant wages and lower tax revenues, it’s fair to say any provincial economic projections made earlier in the year would not be accurate. Even when the forecasting in the Department of Finance might improve with more conservative projections, we just don’t know how these macroeconomic-level events will dictate future development.”

Bill 148 passed Third Reading last Friday and now awaits Royal Assent and Proclamation.

“The premier’s position on arbitrated public service contracts that fail to factor an employer’s ability to meets its compensation commitments represents an important and responsible step in realigning the province’s fiscal priorities,” adds Navarro-Genie.

Navarro-Genie points to an arbitrator’s decision in October 2011 that granted Registered Nurses of NSGEU Local 97 a wage increase of 5.1% in 2012, which supposedly came at a time of “fiscal restraint” under the previous NDP government. The decision later laid the groundwork for the Nova Scotia Nurses Union (NSNU) to negotiate a two year increased wage settlement of a 5.5%increase (2.5% retroactive to November 2012, and 3% retroactive to November 1, 2013).

But with talk of a Charter challenge in the air against the legislation, the issue could drag into the courts for years, deferring the risk of a high cost to Nova Scotians in the future.

“One might as well as well have invoked the Constitution’s Notwithstanding Clause from the start,” said Navarro-Genie.”

The use of the constitutional tool preventing court challenges could have brought the Nova Scotia public five years of public wage stability.

“Premier McNeil has set a major standard in labour relations across the country,” added Navarro-Genie. “But we could very well end up with a situation similar to Ontario where the Wynne government is being challenged by teachers and other unions over collective bargaining and wage pattern freezes.”

Last week, the Elementary Teachers’ Federation of Ontario (ETFO) along with the Ontario Secondary School Teachers’ Federation (OSSTF), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees’ Union (OPSEU) and Unifor, challenged Ontario’s “Putting Students First Act,” also known as Bill 115.

“In five years we could very well be thanking this government for having the foresight to move forward with this legislation” Navarro-Genie said.


For more information, please contact:

Marco Navarro-Genie

The Atlantic Institute for Market Studies is a Canadian non-profit, non-partisan research institute that provides a distinctive Atlantic Canadian perspective on economic, political, and social issues. The Institute seeks to stimulate public debate with well-considered argument and evidence-based data. AIMS sets the benchmark on public policy by drawing together the most innovative thinking available from some of the world’s foremost experts and applying that thinking to the challenges facing Canadians.