Sisters and Brothers:
March is upon us once again, and while all Canadians look forward to spring, we in CUPE are looking forward to another round of productive, invigorating and inspiring division conventions. We began with Saskatchewan where our health care workers are in a pitched battle for a new collective agreement. In bargaining for almost two years, the Saskatchewan Health Care Workers’ Bargaining Council faces an employer refusing to bargain, under the cloak of the Saskatchewan government’s essential services legislation, which has effectively denied our members the right to strike. The employer has placed numerous concessions on the table. Well, CUPE members are fighting back, and CUPE’s National Strike Fund is at the ready to support this important and pivotal battle. To date, we have supported their strike averting campaign with $263,270. This money is being used to run advertising, stage rallies and provide written and promotional material to build membership solidarity and garner public support as we move toward a conclusion. I am looking forward to meeting with all the members in Saskatchewan at the upcoming convention where there will be a strong show of solidarity and determination to beat back the concessions and get these workers a decent collective agreement that reflects their hard work and the critical role they play in our health care system.
Unfortunately, there is a similar story in almost every province. Provincial governments in many provinces seem bent on fighting their deficits on the backs of public sector workers with spending restraints and a renewed agenda of privatization. The threat to our collective agreements is very real. The threat to public services, equitable access, accountability and costs to the public is also very real. But the good news is CUPE is more focused than ever. Our renewed Strategic Directions policy sets the agenda for us with plans to strengthen our membership with “The Year of the Steward”, fighting for pensions, renewed activism in the political arena, fighting privatization and bargaining smart. And as our determination is reflected in our strategic plans, so is our readiness reflected in our finances.
We begin 2010 in a very healthy position. As I reported to you previously, the same economy that presents us with these challenges to fight for public services, presents us also with challenges to CUPE’s revenue. We do not expect that revenues will continue to grow at the same pace as we have enjoyed over the last number of years. The recession will impact growth of public services, thereby affecting the growth in our numbers, and it will impact wages, thereby affecting per capita increases. This does not mean we will lose revenues, it means we predict that our growth will slow down somewhat. However, there is a lag between the peak of the recession and the impact on CUPE’s revenue stream, which is very difficult to predict. All of this to say our unaudited financial statements for 2009 reveal a small surplus of $2.6 million.
To some this may come as a surprise because I reported in December that at the conclusion of our third quarter, we were facing a slight deficit. At the time, we thought that this was the beginning of the recession showing it effects on CUPE’s finances. At the time, we were predicting that our year end result would leave us with a surplus of approximately $1 million. However, this was not the case. Detailed analysis of the year end result shows that there are a number of contributing factors, both from the revenue and the expenditure side, that have combined to create the swing between the third quarter results and the year end results. The highlights of the variance in revenue and expenditure are presented below and the detail presented in the financial statements themselves. However, to summarize, per capita revenues are slightly over budget owing to market adjustments in some regions. Expenditures are under budget with the largest variance in salaries. This is due to both vacancies and unfilled positions, mainly at National Office.
The swing from third quarter to year end, in which we went from a small deficit to a surplus of $2.6 million, is largely due to two small accounting issues that turn out to have a large effect. The first is the recording of costs for temporary reps, which is done manually. An error in this manual process created a swing of over $500,000 from the third quarter statements. Our new computerized human resources system will alleviate this kind of oversight in the future and we expect to have that system fully in operation this year. Secondly, the posting of revenues from locals defunct after five years accounts for a further gain of $500,000. We have traditionally posted these revenues at year end and are looking at revising our accounting of these revenues to track them throughout the year.
Finally, of the $2.6 million surplus over budget, we are left with a Fund Balance showing a $1.9 million surplus at the close of 2009. The Fund Balance is the total of all surpluses and deficits over the life of CUPE and takes into account monies that are earmarked for structural purposes such as capital projects, fightback fund and national convention. What this means is that we remain in a healthy financial situation as we face the challenges of the recession ahead. With that, I report to you the detail of our finances and operations to date.