Federal union wants 47% higher wages, more benefits over three years, says Treasury Board

PSAC Ontario Region/Facebook

The feds are set to war with federal union workers as contract negotiations continue to heat up amid concerns of worsening inflation.

Though the federal government is to negotiate with 300,000 federal workers, the most considerable and fraught negotiation is between the Treasury Board and a group of 120,000 workers represented by the Public Service Alliance of Canada (PSAC) 

The workers range from operational service employees who maintain federal government buildings to administrative staff in government.

PSAC is demanding the Treasury Board provide them with a double-digit wage hike to account for higher inflation and to make remote work permanent.

In January, Canada's largest union accused the Treasury Board of not meeting the union's wage demands of annual salary increases that match inflation, leading to a breakdown in dialogue between both sides.

The feds offered a 2% yearly wage hike over three years, pushing PSAC towards a strike vote in April.

The Treasury Board expressed disappointment with the decision to pursue a strike vote despite continued calls for a return to the bargaining table. 

"We believe there is lots of room to reach a fair and reasonable agreement for public servants," reads a department statement from January.

However — separate from the main contract negotiations — approximately 35,000 Canada Revenue Agency workers represented by PSAC have committed to an ongoing strike vote from January 31 to April 7, possibly leading to the most significant strike action by federal public servants in decades.

The former clerk of the Privy Council of Canada lauded the collective agreements with public-sector workers as a complex and arduous process, owing to the scale of the federal public service, the variety of jobs, and the government's fiscal position in any given year.

"It is ultimately a spreadsheet. You have a public-service wage bill that is roughly $50 billion. You have to determine who gets what currently and what the pension liability will be down the road," said Michael Wernick, former clerk of the Privy Council of Canada, now the Jarislowsky chair in public-sector management at the University of Ottawa.

According to Wernick, the past decade observed uniformity in wage negotiations, with most public servants getting increases of 1.5% to 2% a year, which was in line with inflation. But he contends that the return of higher inflation (6.8%) has impacted private- and public-sector compensation, even for non-unionized workers.

"If you're gambling that inflation will stay high, you would want to maximize the settlement, but if you're gambling that it is going to subside, you would not want to lock in big cost increases," he said.

Also factoring into the negotiations is PSAC's push to include remote work in collective agreements after the Treasury Board mandated last December that public servants return to the office at least two or three days a week.

Treasury Board President Mona Fortier announced last month that workers from all departments must return to the office by Monday, January 16. Public servants must work in person at least twice a week by the end of March, with some departments previously mandating a hybrid work model before the announcement.

PSAC subsequently filed a complaint with the Federal Public Sector Labour Relations and Employment Board against the federal government's hybrid work mandate and said they would help employees file grievances related to the mandate. 

However, the Treasury Board maintains that the work location is the employer's right.

According to the government website on collective bargaining, the Treasury Board "is the employer for the core public administration."

According to PSAC President Chris Aylward, wages remain the biggest concern for the union.

The Operational Services (SV) bargaining group — representing almost 10,000 public employees such as firefighters, ship crew, cleaners and lighthouse workers — is demanding the Treasury Board give them a hefty wage increase of 47% over three years.

The board recently ruled that PSAC's asks is "compensation far beyond what is reasonable."

In an e-mail to The Globe and Mail, the union noted the government's 47% wage projection as "wildly inflated" because it included leave and benefits that it has yet to negotiate.

Nevertheless, the Canadian Taxpayers Federation (CTF) condemned the Public Service Alliance of Canada outright for its uncanny demands. Many families live paycheque-to-paycheque and cannot afford the asks of federal public servants.

"Families are trying to figure out whether they can afford milk or ground beef at the grocery store, and government union negotiators are asking for an extra $9.3 billion," said Franco Terrazzano, Federal Director of the CTF. "The government's bargaining position must be no to these demands."

The Treasury Board of Canada Secretariat provided the CTF with PSAC's demands for increased wage and non-wage benefits across each bargaining group over the next three years, including a 25% increase for education and science (EB) workers, 29% for program and administrative (PA) workers, and 9% for technical service (TC) workers.

Including SV workers, the demands — when compounded — would represent a 28% increase over three years.

According to conservative costing of PSAC's pay proposals and other monetary proposals, such as an increase in overtime rates and expanded leave provisions, the annual cost is $3.1 billion. 

"Over three years, that would amount to a cumulative cost of $9.3 billion," stated the CTF.

The Treasury Board noted that "PSAC's pay proposals and other monetary proposals, such as greater overtime pay and expanded leave provisions, would "represent an ongoing annual cost increase of approximately $27,500 per employee across the 119,000 employees in the EB, PA, SV, and TC groups."

In addition to wage increases, the Treasury Board told the CTF that "PSAC has a significant number of costly non-wage-related demands."

The union wants to double paid leave for family-related responsibilities to 75 hours yearly and increase overtime pay to double the rate.

They also want to accrue four weeks of vacation leave after four years of service instead of seven years and extend eligibility for various allowances and premiums, including shift premiums and meal allowances.

While the negotiation process remains ongoing for the next few months, PSAC's threat of a strike vote in April could compel the federal government to reach a deal without taking job action. 

However, Wernick cautioned that federal union workers must be careful with the threat of strike action. 

"If they push it to a point where the public is seriously inconvenienced, there will not be a huge well of goodwill to draw on," he added.