B.C. cities need hard negotiators

Guest Commentary
By Laura Jones

I am in Montreal with my three kids in tow. It’s a fantastic adventure that had a funny start.
There is always lots of construction in Montreal, so I wasn’t surprised to see policemen rerouting traffic around construction sites. What did surprise me is the way they were dressed: normal police shirts and traffic vests paired with bright colored pants of various descriptions, including a pair of pink camouflage pants.
“Mommy, why are the policemen wearing funny pants?” What to tell the kids? This is a fun city. Is it the joie de vivre of Montreal expressing itself? Is it meant to make the tourists smile?
I had to ask my Quebec colleagues, who explained that it had nothing to do with entertaining tourists. It was a continuing protest against the provincial government for passing a bill that put the brakes on excessive compensation for municipal employees. Bill 3, passed late last year, requires municipalities to change the split on municipal pensions so that the government and municipal employees each contribute 50 per cent. In Montreal, the split had been that the government (taxpayers) was contributing as much as 70 per cent, while employees were contributing only 30 per cent. The law got some national attention as the immediate protests saw chairs flying in council chambers and garbage burning in the streets.
How did a provincial government get brave enough to take such a strong stand when senior levels of government are typically so careful about not upsetting municipal governments? In this case, the public was mad. They had became aware of how dysfunctional the compensation of municipal employees had become with taxpayers on the hook for pension liabilities estimated at close to $4 billion for 170 Quebec municipal pension plans.
Overly generous compensation packages are not unique to Quebec. In B.C., municipal employees earn an average of 17 per cent more than equivalent jobs in the private sector. (Occupations such as police and firefighters aren’t included in these calculations because there are few equivalents in the private sector.) Between 2000 and 2012, municipal government spending in B.C. outstripped a reasonable benchmark by a wide margin: Population grew 15 per cent while inflation-adjusted spending increased by 55 per cent.
In other words, we have a problem, too. Maybe the B.C. government should do more about it. The B.C. government has found one good way to bring more accountability to municipal spending by creating a municipal auditor general. The office has done a number of performance audits of local government and uncovered some serious problems such as major expenditures made without council authorization, lack of value for money, lack of written contracts and conflict of interest in awarding contracts.
The next frontier could be to better protect taxpayers’ interests at municipal bargaining table. Municipal staff charged with negotiating salary and benefits are often totally outgunned by well-funded unions. As soon as one municipality makes a generous deal, it then becomes the new standard for the others. Privately, many mayors complain about this problem.
To help, the B.C. government could create a special team of bargainers with enough experience to go toe-to-toe with the union heavyweights. When local unions call in the heavy hitters to help them make better deals, local governments would have access to their own heavy hitters to protect taxpayers.
Municipal governments tend to want the province to stay out of their business but taxpayers would arguably be much better off it got more, not less, involved. Maybe in B.C. we can do this without our police wearing funny pants.
Laura Jones is Executive Vice President of the Canadian Federation of Independent Business.