Net ZeroIt’s a doubly disturbing development.

After freezing wages for two years, a number of provincial Liberal governments across the country are again forcing public sector workers to accept “net zero” agreements requiring any wage or benefit improvements to come from savings or limited spending increases.

The “net zero” approach was started by the BC Liberal government shortly after the - 2009 recession. It effectively involved wage freezes for all provincial broader public sector workers, which meant real wage losses after accounting for inflation.  This tactic was followed by limited wage increases in subsequent agreements.

Now other provinces (like Ontario) that already demanded two-year wage freezes from their public sector employees are insisting on net zero increases in subsequent agreements. It’s just extending the number of years public sector workers in these provinces receive very limited or no wage increases.

The Liberal government in Nova Scotia is also demanding “net zero” increases in collective agreements with provincial broader public sector workers, with the threat of legislating these terms looming.

The province was demanding three years of zeroes followed by just one per cent increases in the fourth and fifth years. This proposal would mean annual wage increases averaging less than 0.4 per cent, well-below the rate of inflation. After inflation it amounts to a loss in real wage value  of more than seven per cent after five years. The province is now settling for slightly less draconian terms, but is still asking for a two-year wage freeze and subsequent increases below the rate of inflation. It still adds up to real wage losses of 4-5 per cent over the terms of the agreements.  The Nova Scotia government is demanding these real wage cuts from their workers even though they are expecting to run a surplus next year. 

Liberal governments in New Brunswick and Quebec are also demanding another round of concessionary wage settlements from their public sector workers, claiming these are necessary to help them balance the books.

It adds up to a disturbing state of affairs. While Justin Trudeau was elected on a platform that included stimulating the economy, helping the middle class and bargaining in good faith with public sector workers, his provincial counterparts are undermining his positive approach. As Canada’s new prime minister has emphasized repeatedly, it’s time to move beyond the politics of fear and division. The Canadian economy depends on its workers; it’s better if we work.