Stephen McNeil triumphs in labour negotiations, says Graham Steele

Stephen McNeil has triumphed in public-sector labour negotiations.

He has succeeded where his four predecessors failed, leaving the unions cowed and powerless.

This is the McNeil government at its best: learning from past mistakes, planning how to avoid the same fate, then executing on the plan.

Both the government and the major unions had said there were no talks. The centrepiece of the fall legislative sitting that started on Thursday was going to be a forced settlement. If the unions could rally their members and, especially, public opinion, things could have gotten hot.

As it turns out, both sides were fibbing. There were talks, and they'd been going on for several weeks, and their conclusion was announced on the very day the legislature resumed (for the teachers) and the next day (for the Nova Scotia Government Employees Union).

So the legislative session that threatened to be hot will be very tame. All the MLAs will be home for the holidays. The Liberals will hit the budget targets they need to win the 2017 election.

And Stephen McNeil is the first premier in a generation to beat the unions.

How we got here

Last week's settlements weren't the result of a few weeks of bargaining. They were the culmination of 30 years of labour relations, during which the pendulum swung both ways but mostly tilted towards the unions.

The full story of Nova Scotia's public-sector labour relations will have to wait for another day. For now, I'll put this week's events in the context of my own experience.

When I became the finance minister in 2009, the world's financial markets were in turmoil. The economy was weak. We had a structural deficit in the hundreds of millions of dollars, revenue was flat or even falling, and previous governments had run up big debt. There was no room to breathe.
 
Labour relations were a mess. There were hundreds of bargaining units in a small province. The unions talked only of leapfrog and catch-up between different units. The previous government had set a multi-year wage pattern that the unions wanted to continue. Unions and arbitrators paid no attention to the public's ability to pay.There was no common sense.

In this environment, we asked the unions to agree to a three or four-year deal, with one per cent wage increases. The unions said they would agree only to a two-year deal, and only if they got contract language that strengthened their members' job security. For better or worse, we agreed.

When the time came to re-negotiate, the NSGEU was merciless. They tabled a ridiculously high wage offer. Essentially, they wanted to catch up on what they'd "given up" over the previous two years, plus plus plus.

Moreover, the lead table was Local 42 of the Capital District Health Authority. If they went on strike, the largest health authority in the province would grind to a halt, and the effects would be felt throughout the province.
 
Negotiations were fruitless and the countdown to a strike started. Surgeries were cancelled. Hospitals were emptied. Thousands of sick people were being used as pawns, and every day would add hundreds more. The pressure on the government was enormous.

To cut a long story short, the Dexter government caved. The contract went to arbitration, a generous award was made, and the pattern was set that spread through the rest of the public sector.

The only thing the unions didn't take into account was that Stephen McNeil was watching, and learning. When his turn came, he was ready.

Divide and conquer

McNeil had made up his mind that he wasn't going to suffer the fate of his predecessors.

When his turn came, his first move was to pass essential services legislation. That meant he would never face the strike threats that hobbled the Savage, Hamm, MacDonald and Dexter governments. That early move has been crucial.

McNeil's next move was to reduce drastically the number of bargaining units in health care. The aim was right, except he went too far — in effect, he tried to kneecap the NSGEU, a move resisted by arbitrator Jim Dorsey. But once the dust settled, the end result was fewer bargaining units.

With the rules re-written and the board now tilted in his favour, Stephen McNeil made his penultimate move. The offer was a five-year deal, with a two per cent wage increase at the back end. If there was no deal, he would legislate.

The last move in the chess game was to divide and conquer. As expected, McNeil first went for a deal with the teachers.

The Nova Scotia Teachers' Union is not a member of the Federation of Labour and has a fraught relationship with the other unions. Above all, the NSTU is terribly afraid of losing some of the generous benefits and contract language it has accumulated over decades. They were vulnerable, and McNeil knew it.

Once the teachers gave in, the situation became hopeless for the NSGEU. Any arbitrator would look at the teachers' deal and say, "If it's good enough for the teachers, it must be okay." The NSGEU also feared what it would lose if a settlement was legislated.

Now that the teachers and NSGEU have given in, the other unions don't have a leg to stand on. They won't win an arbitration and they won't win public opinion. They're all done, and they know it. One by one, they will give in too.

Labour relations a long game

Five years with a three per cent wage increase: It's a terrible deal for the unions. I can still hardly believe they accepted it.

The unions will try to sweeten the stink by claiming it's a four-year deal, because the final wage increase comes on the last day of the fourth year. Back in Hooterville, we call that a five-year deal.

Maybe the unions, deprived of the threat of health-care strikes, are finally acknowledging what I've suspected for a while: outside of targeted strikes, they cannot mobilize their members and they cannot win public opinion.

Labour relations in the public sector is a long game. When one side beats up on the other, there is almost always a reaction somewhere down the road.

Nova Scotia's unions beat up on four successive governments, of all three political stripes. I helped them beat up on the Hamm and MacDonald governments, and they certainly beat up on the Dexter government. If they don't like where they are today, the first place they could look is in the mirror.

If this deal is too hard on the unions, maybe there will be another reaction, somewhere down at the end of the road. 

That road is now five years long and in politics that's an eternity.

Meanwhile, Stephen McNeil is smiling. He watched. He waited. And now he has won.