2016-09-16

Analysis

Interest arbitration is about exciting as watching grass grow — but the issue of how is escalates policing and firefighting costs is a very big deal for local governments.

Peter J. Thompson / National PostFirefighters, police and rescue teams search a collapsed building on Eglinton Avenue near Bathurst Avenue, Monday April 18, 2016.

Now Ontario doctors want binding arbitration as a precondition to contract talks after Ontario Medical Association members voted against a new physician services agreement this summer. That deal would have outlined physician fees and compensation for the next five years. But the government is shy after a similar policy in B.C. physician services escalated costs by 20 per cent in one single contract, a cost of $400 million to the provincial treasury.

As the debate over the doctors’ deal rages, this somewhat obscure form of labour negotiations has bubbled to the surface and the three main provincial parties’ varying stances speak volumes about their shifting ideological lines — especially the Tories as their new leader.

So what, exactly, is interest arbitration?

It sounds complicated, but it’s simpler than it sounds: when a service is declared essential, whether that’s firefighters and police or nurses, and a deal can’t be negotiated between an employer (i.e. a government) and its employees (usually public sector unions), interest arbitration means the deal is struck using a third party expert, an arbitrator.

Of course, arbitrators can be involved in labour negotiations of all kinds, but interest arbitration is different because the employees involved can’t strike — because they’ve been declared “essential services” like nursing or policing. Interest arbitration is like essential services alternative to a strike, except both sides have to accept whatever deal is drafted. So to ensure fairness, more often than not, arbitrators use something called “pattern bargaining” to set wage increases. In the municipal sector has led to police and firefighters seeing massive hikes that have strained city coffers. Just this week in Owen Sound, firefighters got a 10 per cent pay hike and $374,000 in back-pay (to be split among the force) thanks to an interest arbitration decision.

Frank Gunn/ The Canadian PressOntario Health Minister Eric Hoskins speaks as Premier Kathleen Wynne looks on.

The Association of Municipalities of Ontario (AMO) has for years campaigned for reforms to interest arbitration. It even has a handy YouTube video explaining the issue.

Police services budgets can eat up a huge chunk of total spending for many cities. That heavy burden is compounded by increases, AMO says — since 2004, the Ontario Provincial Police and the 12 largest municipal forces have seen their wages and benefits rise 37.2 per cent. Over the same time, inflation rose about 21 per cent.

In response, the Tories have introduced several bills in recent years calling for arbitration reforms and aiming at lowering costs for municipalities by gearing increases to what cities can afford. It’s something the PCs campaigned for years to reform under past leaders. During the 2012 budget bill negotiations, they went so far as to almost bring down the government over sections of its budget bill that didn’t go far enough to reform interest arbitration.

[youtube=http://www.youtube.com/watch?v=aNSH-7ElejU&w=640&h=390]

But since Patrick Brown took over the party in May 2014, he’s been keen to bring firefighter and police unions back into the fold, and shy of championing the interest arbitration issue. He maintains policing costs can be lowered by better tackling mental health care since so many police calls now involve mental health issue. Brown also said this summer at a National Post editorial board meeting that city leaders didn’t come out to support the Tories, so why should they carry the weight of such a controversial stance?

“So I said don’t come back to us unless you’re willing to say what you say in closed doors at AMO in public,” Brown said last summer. “I was frustrated that sometimes we were doing the work on behalf of others (the cities) who didn’t have the courage to take on police and firefighters in public) themselves.”

He essential repeated those comments in August at AMO’s annual gathering of mayors, this year in Windsor. Both its outgoing and incoming presidents called once again for arbitration reform — and it didn’t go over well with mayors that there’s no party left at Queen’s Park ready to champion this issue.

Clifford Skarstedt/Peterborough Examiner/Postmedia NetworkOntario PC Leader Patrick Brown

Basically, Brown’s rejecting the fiscally conservative stance of arbitration reform in favour of one that takes a more centrist tack — all because the mayors are reticent to back any one party. Perhaps this is what he means when he talks about a new “pragmatic conservatism.”

Meanwhile, cities and regional municipalities continue to raise property taxes just to cover their emergency services needs.

Those very concerns over “ability to pay” is why the province is so wary of expanding who gets interest arbitration — even though sometimes the arbitrator rules in favour of government. A group of registered nurses in Ontario just go a 1.4 per cent wage increase, far below inflation or what police and fire get. So it’s not guaranteed arbitrated agreements will make doctors’ fees soar, but it’s a concern.

That prompted Ontario Health Minister Eric Hoskins to this week accuse the opposition of “pandering” to doctors over their call for binding arbitration.

“They have been pandering… to the doctors in their ambiguous response to that question,” Hoskins said. “Ontarians need to understand where they stand on this because it has enormous fiscal implications.”

Brian Thompson / Postmedia NetworkAn Ontario Provincial Police vehicle

Both Brown and NDP leader Andrea Horwath have said arbitration should be part of the conversation, but despite Hoskins’ tough talk, they haven’t outright said the government should agree as a precondition to talks. And, as Horwath pointed out Tuesday, as opposition members, they aren’t privy to what’s actually being discussed and it’s on the government to make those calls.

The fact that Brown would even be so vocally in favour of binding arbitration is out of step with his party’s historic ideology. He’s said multiple times, and in a written statement in late August, “all options should be on the table to resolve the current impasse, including binding arbitration.”

It’s an easy stance to take from the sidelines, but one that could prove costly to taxpayers. It will be interesting to see, if the Tories ever form government, if Brown’s cabinet will prove as labour friendly in office as they do in opposition.

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