Labour Pains Canadian Taxpayers Federation. Private-Public Pay Gap. Federal Government Employees

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1 Canadian Taxpayers Federation Not for profit advocacy organization, eight offices across Canada Accepts no government funding ever Labour Pains Canadian Home Builders Association Central Interior Kamloops March 13, 2013 Funded by after-tax, free will donations from 21,000+ individual Canadians Dedicated to three things: lower taxes, less waste, more government accountability Private-Public Pay Gap Public sector workers (federal, provincial and local) in B.C. earned wages 13.6% higher, on average, than their private sector counterparts in 2011 That premium doesn t include better pensions or benefits Federal Employees 2006: 336, : 379, : 349,000 Federal Average Salary 2006: $86, : $111, : $129,800 Federal Total Payroll 2006: $29 billion 2011: $42.3 billion 2016: $45.3 billion Current National Debt: $608 billion 1

2 Canadian Payroll Costs Federal government staff: 7.1 per cent annually Private sector staff: 3.1 per cent annually Whatever happened to Jean Chretien? 1993: 345,942 employees 1998: 288,484 employees Annual savings: $2.3 billion Provincial Payroll - $24 billion - 55% of total B.C. Budget - A 1% raise costs taxpayers $240 million - In 2011, 0.6% of government workers lost their jobs compared to 4.3% in private sector ICBC 70% spike in senior management compensation over 5 years 54 employees made $200,000 or more Used Canada Mortgage and Housing Corporation, federal government and Alberta government as pay comparators 2

3 B.C. Hydro Gold Standard corporate culture Compensation considered very generous. 99% of employees got performance bonuses $42 million in bonuses paid out 41% employee growth in 5 years Overtime now 11% of total salaries paid Community Living B.C. 30 employees making $100,000+ Six making $150,000+ Executives got bonuses when entire province was lashing organization Later changed to holdbacks Fired CEO was earning $230,000 a year B.C. Ferries David Hahn, The Million Dollar Man Over six years, increased his pay from $228,000 to $1.2 million a year Retired with a $315,000 indexed, annual pension During that time, B.C. Ferries went from $49.9 million profit to $20 milion loss. Fares increased 45 to 80 per cent 60 per cent of Ferries employees earn more than $89,000 a year Liquor Clerks Private Beer and Wine Store: $11/hour Liquor Store: $28/hour (inc. pension and benefits) Teachers Private Schools: $68,000/year Public Schools: $85,000/year (inc. pension and benefits) Tim Hortons Private Tim Hortons: $12/hour (NB) Tim Hortons: $28/hour (inc. pension and benefits) ***NB lost $260,000 last year 3

4 Susan Lambert, President, BCTF Wanted $2.2 billion in pay and benefit increases (present payroll = $2.9 billion) Advocated huge tax hike during B.C. Budget hearings 25% hike in provincial income tax Restoring 100 other B.C. Liberal tax cuts Cut everyone else s pay to pad their own! Provincial Wage Restraint - Olympic Spendathon - Net Zero - Cooperative Gains Kamloops % population growth - 38% municipal spending growth (operating) - Ranked middle of municipal pack in B.C. for spending Kamloops 2011: $153.4 million spent $56.7 million in wages 2010: $145.8 million spent $54.1 million in wages 4

5 Employees making $75, Lifeguards Private Pool: $14.50/hour Pool: $22.80/hour (PLUS pension and benefits) Parks Workers Private Parks Worker: $14/hour Parks Worker: $22.80/hour (PLUS pension and benefits) The Pension Gap Workers Retires at age % have workplace pensions 95.6% have defined benefit pensions Prime retirement driver: taxpayers Private Sector Retires at age % have workplace pensions 49.3% have defined benefit pensions Prime retirement driver: RRSP savings 5

6 The Solutions A Compensation Equity Act Pursuing the Penticton Path Compensation Equity Act Could make it illegal to pay government employees more than private sector counterpart Could cap government-funded pensions to annual household income Could change pension plans to defined contribution or, better yet, dollar for dollar RRSPs Act Benefits Could create a database of research on pay and benefits across B.C. Use real comparators, not government monopolies Could rein in provincial and municipal spending and provide more accountability Could create a skilled team of negotiators working for taxpayer interests Act Addresses The Future We can t afford to overpay the market for labour Labour most significant cost for any government Taxpayers pay 42% of income to various levels of government Unfunded liabilities in federal & provincial pensions now at $254.2 billion Will worsen Public Support Angus Reid Survey: 74% of B.C. residents think it s unfair government workers get pay and benefit packages higher than private sector 80% think compensation should be brought into line with private sector 78% says we can t afford to pay more to government employees 72% support Compensation Equity Act Pursuing the Penticton Path 6

7 The Penticton Path Three straight property tax freezes Cut number of employees earning $75,000 from 75 to 59 Lowered starting CUPE wages by $5 per hour Found efficiencies through a variety of means Elections 2013 and 2014 Provincial May 14, 2013 Will they control labour costs? How will they pay for raises? Would they support Compensation Equity? Municipal November 15, 2014 Will they control labour costs? How will they pay for raises? Will they adopt Penticton s model? Questions? 7