Higgs legislation would force 5 public-sector unions into new pension plan
Workers say premier’s bill breaks contract by forcing them into shared-risk system
The Higgs government has introduced legislation to force five public-sector unions into shared-risk pension plans, hoping to wrap up a big piece of unfinished business from a major strike in 2021.
To end that dispute, two locals of the Canadian Union of Public Employees signed a side deal that set aside a sticking point over pensions and created a process to resolve it.
Now, Premier Blaine Higgs is accusing CUPE of dragging its feet in that process and will legislate an end to it.
"We need to move forward with a New Brunswick pension solution for our employees," Higgs told reporters.
"Legislation was not the route we wanted to go but unfortunately negotiations have not resulted in any workable plan."
Union officials accused Higgs of effectively tearing up their existing contracts with the bill introduced Wednesday.
Some CUPE members ripped out pages of their collective agreement Wednesday morning and tossed them into a fire in a metal barrel on the front lawn of the Legislature.
"It's a pension issue, but moreso, it's a breaking of a free, collective agreement, signed document. That's the big issue," said Theresa McAllister, the provincial president of CUPE Local 2745, one of the unions affected.
She said if the premier gets away with the move, it'll set a precedent for all public-sector unions.
"This is going to have a big impact on all groups. Of course we have to push back. We have to fight back."
Asked what that will involve, McAllister and CUPE 1253 president Iris Lloyd said to "stay tuned."
Opposition Liberal MLA and labour critic Marco LeBlanc slammed the government for targeting unionized workers just six sitting days before the legislature is scheduled to adjourn for the Christmas break.
"They're forcing them, through legislation, to accept things that they should be at the negotiating table negotiating, not in this house," he said.
The two CUPE locals represent about 7,200 school custodians, maintenance workers, bus drivers and administrative staff.
Three groups of nursing home employees coming under the New Brunswick Council of Nursing Home Unions are also covered by the legislation.
In 2021 Higgs wanted the two school unions to agree to a shared-risk pension plan like the one he crafted for large parts of the public sector in 2014, when he was finance minister.
To end the 16-day strike by several CUPE locals, they struck a side agreement that envisioned negotiations and, failing an agreement, the use of third-party actuaries to settle the pension issue.
Higgs said the unions failed to live up to that.
"We saw no light in that tunnel for that to happen," he said.
But McAllister and Lloyd said the side deal allowed for the extension of timelines, something the province itself used before deciding this fall to adopt legislation.
While rejecting the idea that he was breaking the contract, Higgs could not explain how the existing collective agreement allows for this move.
Instead he repeated that the union hasn't respected the timeline in the 2021 side agreement.
The legislation also explicitly immunizes the province from a legal challenge.
The three nursing home groups weren't part of the 2021 side deal on a process but were apparently added to the bill on Tuesday, according to Sharon Teare, president of the New Brunswick Council of Nursing Home Unions.
"Until this morning, there was no notice that we would be included in that," said Teare.
She said existing nursing home contracts already have language on resolving pension issues.
"I don't understand how he can just arbitrarily change legislation and take those collective agreements and disrespect them and the process."
The legislation would set out a deadline for negotiations to lead to a memorandum of understanding in which CUPE would choose one of three shared-risk plans to join.
The next step would be a "transfer agreement" between administrators the old and new plans to start the transition in February 2024.
According to the bill, if the two sides can't agree, an arbitrator can step in and impose a resolution.
Higgs said that's not unlike what was contemplated in the side agreement with CUPE, except now there's a firm deadline for an imposed solution.
The shared-risk system links the performance of pension funds to the market and relieves the government and taxpayers of the risk of having to make up pension shortfalls, as it must do in defined-benefit plans.
The five affected locals have shortfalls totalling $285 million, the province says. CUPE has accused the government of creating that gap by starving the funds of required contributions.
The legal expert hired by the province to oversee this move says the shared-risk model has performed well for the employees who joined it almost a decade ago.
"The results have been very good for the members and we anticipate the results to be very good for these members as well," said Halifax lawyer Hugh Wright.
The province says retirees already in the shared-risk system have seen a 23.27 per cent cost of living adjustment to their pensions over the last decade, compared to increases of 16 to 20 per cent for those in the five bargaining units not in the system.
Higgs said the government presented a proposal to CUPE in February and heard nothing from them until September, when the union proposed putting the pensions in an Ontario-based plan that he said would cost the province $1 billion.
In contrast, shifting the pensions to a shared-risk system would cost much less: about $365 million, according to the province.
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