Four things you should know about Bill 124

By Evan Johnston

On June 5, the Ontario government introduced Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019.

Peter Bethlenfalvy, current Treasury Board President and former Wall Street executive, claims that the bill “allow[s] for reasonable wage increases, while protecting the province’s front-line services, restoring the province’s financial position and respecting taxpayer dollars.” In reality, however, the bill represents a significant attack on the wages, benefits, and rights of workers across the province.

Labour leaders have been quick to denounce the legislation and to identify the threat that it poses to the movement as a whole. OPSEU President Smokey Thomas described the bill as having “no respect for the rule of law or the right to fair collective bargaining,” CUPE Ontario President Fred Hahn called it “a continuation of the Ford Government’s assault on the people of Ontario,” and Unifor President Jerry Dias called it “a disastrous and offensive slap in the face.”

While most of the coverage of the bill has so far characterized the bill as merely a “wages” or “salary cap” for workers in the public sector, the legislation goes much further than that. Here are five things you should know about the bill.

1. It reduces the value of your wages

Bill 124 imposes a series of 3-year “moderation periods” on public sector workers across Ontario (affecting both unionized and non-unionized workers) that limit not only workers’ salaries, but other monetary compensation as well (ie., benefits plans, health care spending accounts, etc). During these moderation periods, no new increases to your salary and your benefits could exceed 1% per year.

There is still some debate over whether this is 1% combined, or seperate 1% for salary and compensation, but this will certainly be tested at bargaining tables over the next several weeks.

At the very least, unions aim to negotiate wage or salary increases that will keep pace with the rate of inflation. With the yearly rate of inflation in Ontario currently sitting around 2.0%, three consecutive years of increases capped at 1% will result in the erosion of workers’ wages as the cost of living will continue to rise.

The legislation even aims to prevent unions from negotiating larger increases either before or after one of these “moderation periods” to make up for lost ground. While no one is quite sure how this power would work in practice, there are a lot of new powers concentrated in the hands of the President of the Treasury Board and we should expect them to use these new tools to the fullest extent possible against the interests of workers.

2. It gives the President of the Treasury Board a lot of power

What are some of these extraordinary new powers? For starters, any collective agreement negotiated between a union and an employer that happens to exceed the 1% cap may be vetoed by the President of the Treasury Board. If that happens, unions and employers will be sent back to the bargaining table to start all over again.

And even though the legislation is not yet law and is not expected to pass until the fall, the President of the Treasury Board will have the power to retroactively veto any collective agreement negotiated and ratified from June 5 onward.

This veto power also extends to arbitrations, which means that any decisions awarded by an arbitrator can be overruled by the President of the Treasury Board to ensure that it any monetary awards align with the legislated compensation cap — regardless of what the arbitrator’s rationale may have been.

One dangerous aspect that rank-and-file activists should be aware of is the fact that Bill 124 allows for the President of the Treasury Board to make individual exceptions to the rule. This provides an opening for a divide-and-conquer strategy by the government, and we can anticipate them trying pit workers from different sectors and from different unions against one another.

From the other side, we can also expect some sections of labour leadership to lobby the Tories to make an exception for their own particular workplace or sector rather than act in solidarity with the rest of the movement. We need to be prepared to make arguments in favour of a common front, because anything less will result in the same old race to the bottom.

3. It undermines the right to free collective bargaining

With the President of the Treasury Board’s increased powers comes a renewed assault on collective bargaining rights. If the Ontario government has the power to unilaterally overrule agreements made between workers and their employers — and to interfere with the ability of workers to freely and democratically negotiate the wages, benefits, and working conditions in their workplace — then the right to collectively bargain is severely undermined.

As Unifor pointed out in their statement, Bill 124 “would violate a landmark Supreme Court ruling in Health Services and Support-Facilities Subsector Bargaining Association v. British Columbia, 2007, that found that free and fair collective bargaining is a charter protected right of all people in Canada.”

That is why the Ford government announced a series of sham “public sector consultations” back in early April. The Supreme Court has repeatedly ruled that while governments can legislate wage freezes, they have to engage in some form of “consultation” with unions before imposing them, since the right to collective bargaining is protected by the Charter.

Unions will certainly be launching legal challenges once the bill passes into law, but the fight to defend workers’ rights can’t be put on hold, it must start now. The legislation has already signalled to employers across the province that the government will have their backs as they roll-back the gains of workers, whether they be in the public or private sector.

4. It scapegoats workers for a manufactured crisis

One of the key political takeaways from this legislation is that it advances the narrative that public sector workers have had it too good, and that attacking their wages and benefits is necessary in order to restore “sustainability to Ontario’s finances.”

In fact, the Tories have been beating the debt crisis drum for quite some time, and they have done all they can to shock people into believing that sacrifices are not only justified, but “a moral imperative” that workers owe to our grandchildren.

As Sheila Block, senior economist with the Canadian Centre for Policy Alternatives’ Ontario, argued back in September at the conclusion of the government’s Independent Financial Commission of Inquiry, “This new government is clearly intent on setting up a frame that gives it room to make policy moves it never promised on the campaign trail. Count on the government to use this fiscal shortfall as a cover to cut spending even more than it initially promised during the campaign.” And that’s exactly what they’ve done.

However, as CUPE Ontario has consistently argued, Ontario has a revenue problem, not a spending problem, and Ontario continues to have the lowest per capita public revenue among Canadian provinces. Instead of raising new revenue or cancelling corporate tax giveaways to Ontario’s wealthiest, the Ford government has decided to manufacture a crisis in order to gain legitimacy for their pro-business, anti-worker agenda.

The fight against Bill 124 is a key part of the fight against the drum beat of austerity. We need to argue that the only ones who have been having it too good are the 1%, and it is by taxing their profits and their wealth that we can generate the revenue we need to strengthen our public services.

What comes next?

Bill 124 was introduced on June 5, but since the legislature is on an extended “break” until after the federal election, the bill will likely not be voted on until sometime in early November. This means workers will begin to experience the consequences of the bill from their employers long before the bill becomes law.

For unionized workers in bargaining or who are about to enter bargaining, CUPE Ontario has offered some useful advice: “We should be sure not to modify or amend our bargaining positions on an assumption that the Bill will become Law. In fact, we should make every effort not to be influenced by the introduction of the Bill.” In short, unions and their bargaining teams need to continue to take direction from their members, not Doug Ford.
While we can expect labour leaders to challenge the bill in court come November, we need to fight back against Bill 124 now in our workplaces and in the streets. The Ford government may be vicious, but they are weakened and have recently been made to back down on their major cuts to public health. Our power rests in our ability to connect our different struggles and to build a united front in response to Ford’s shock-and-awe austerity agenda.