PRESIDENT’S MESSAGE: Dismal Provincial Budget Update

On November 22, 2016, the Minister of Finance provided his mid-year financial update for 2016-2017 fiscal year ending March 31, 2017 and let me tell you – it doesn’t look very good. This province is facing a $1 billion deficit; or $800 million if you consider that WCB gave a rebate to employers despite our injured worker rate being the 3rd worst (yes, I said ‘worst’) in the country! (Read the Government’s Spending Decision Backgrounder).

So what exactly does that look like in the healthcare sector? Here are the broad strokes:

  • A province-wide hiring freeze, effective immediately, across executive management, out of scope, and in scope unionized staff. However, if there is an essential hiring need, it will need to be approved by the CEO of the health region.
  • A more efficient use of staff based on what is budgeted for “paid hours”. We aren’t entirely sure what the specifics are around this scheme, but we suspect that it will rear its ugly head in the form of a robust non-replacement policy (practice). The health regions are being directed to actively manage the efficient use of casuals. This is in addition to the current mandate from the Ministry of Health for the health regions to reduce the use of overtime and sick time.
  • While the Ministry of Health is projecting $63.9 million in savings on programs, workforce changes, etc. there is still a remaining $88.1 million deficit.
    • Part of that $63.9 million savings includes a proposed contribution holiday for employers from the Extended Health & Dental plan surplus. This has not been agreed to by SEIU-West, however it was added because there are discussions ongoing.
    • The $7.5 million in administrative savings that were going to be applied to front-line workers is now being delayed. The Ministry of Health doesn’t know for how long, but currently, those savings will be used to offset administrative pressures.
  • The status of any business cases being undertaken by 3shealth to centralize any services will still be required to go through the mandated processes. Which is fine, but the question is where does the money come from to fund things like a centralized Supply Chain system? Come to think of it, did 3shealth see a reduction to its budget?
  • We don’t know about further layoffs or potential bed closures.

In the education sector, this is what we know from the update:

  • $5 million in savings is linked to “…staffing restrictions, contractual savings, IT deferrals, travel restraint and other operational savings.” What this means for our Education Assistants, Library Techs, Maintenance/Custodial staff, Admin Assistants, Bus Drivers and others is unclear.
  • There is currently a review of the education sector underway to determine if school board trustees should be democratically elected or appointed by government and whether the government should reduce the number of school divisions and remove local control from the communities they serve. Maybe government is hoping to find more savings there…?

In the community-based sector, the savings of $9.2 million are mostly based on program cuts for the most vulnerable in our communities and administrative savings found within the Ministry of Social Services. And really, I don’t think there is any way to cut the costs to this sector and still claim that our government is providing social programs in this province…!

Things are bleak and looking tough. And while this is a difficult update from government, a number of people have said that next year will be even worse. There are some media reports that the MLA’s are getting a wage freeze next year and so everyone in the public sector should expect 0. Well, I’m up for shared responsibility to some extent, but let’s not kid ourselves: a 0% increase on $22/hour has a greater impact to a front-line worker than a Member of the Legislature not getting an increase when they make a base salary of approximately $92,000/year! And let’s remember, this government increased the number of MLAs to address the growing workload as our population blossomed.

We did this to ourselves: we voted in a government that didn’t come clean on a budget; we voted in a government that has engaged in questionable land deals and not held people accountable via a forensic audit; we voted in a government that has mismanaged a resource boom to the point that we are here: pinching pennies to pay the bills.

While I am not encouraged by the reality of having to share such bad news, of course, I will keep you apprised of any future developments that occur.

Related Links:

Government News Release: Falling Tax Revenue Increases Deficit (Related documents linked at the bottom of the release)

SEIU-West Media Release: Cuts and Guts Do Not Mean Efficiency

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