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Despite massive private sector pain it has been decades since governments cut employee pay

  • SecondStreet.org report examines when the last time was the federal government, provincial governments and 13 major cities cut employee pay

Start-up Canadian think tank SecondStreet.org released today a policy brief that examines when the last time was that governments across Canada cut salaries and wages for their employees. The report includes information on the federal government, all 10 provinces and 13 major cities.

The think tank decided to examine this issue after massive private sector pay and job cuts in the wake of COVID-19 – Cineplex, Fiat Chrysler Automobiles, the Winnipeg Free Press and several CFL teams to name a few.

“While we often hear of businesses having to cut employee pay, that’s a given during economic cycles. But those cycles seem to not affect government employees,” said SecondStreet.org President Colin Craig. “Generally speaking, government employees have a better chance of getting hit by lightning than receiving a pay cut. Politicians are just not hard people to bargain with.”

Highlights from our research, include:

  • The federal government indicated they have “no data or any information” that indicates there has ever been a negotiated pay reduction with its unions;
  • Quebec’s last pay reduction was temporary and occurred in 1982, while the last broad pay reductions in Prince Edward Island and Alberta were implemented in 1994. New Brunswick provided data showing there have been no pay reductions dating back to the 1970s. Many other provinces indicated they have no information on pay reductions; and
  • At the municipal level, Mississauga and Moncton indicated they have never reduced employee pay. Despite its ongoing economic woes, the City of Calgary provided data that shows no pay reductions between 1974-2020. Many other cities indicated it has been decades since their last pay cut or they simply had no records available.

“Reducing government employee pay, even by just a bit, could help governments avoid raising taxes on struggling families and businesses. The message that could send now is critical, as the private sector reels from COVID impacts,” added Craig. “Pay reductions could also help governments limit skyrocketing deficits without having to cut services. This approach is a far less drastic option for policy makers than layoffs.”

To see SecondStreet.org’s new policy brief – click here.

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RESPONSES:

Federal government

Treasury Board – click here

Provincial governments:

British Columbia – click here
Alberta – click here
Saskatchewan – click here
Manitoba – click here
Ontario – click here
Quebec – click here
New Brunswick – click here
Nova Scotia – click here
Prince Edward Island – click here
Newfoundland and Labrador – click here

Cities:

Vancouver – click here
Edmonton – click here
Calgary – click here
Regina – click here
Saskatoon – click here
Winnipeg – click here
Mississauga – click here
Toronto – click here
Ottawa – click here
Montreal – click here
St. John’s – click here
Moncton – click here
Halifax – click here

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.