Imagine a child constantly demanding more allowance from his parents without offering to do more chores around the house. Tired of the complaining, mom and dad don’t just say ‘no,’ but send Johnny to his room without supper just for asking. They even threaten to take away some of his allowance if he asks again.

This tough medicine might have worked, until mom and dad – unable to stand having Johnny angry with them – cave and raise his allowance by twice what he asked for.

This – in short – is the provincial government’s approach to labour negotiations with the Alberta Union of Public Employees (AUPE).

In 2012, the core-government public service had 29,387 full-time employees. This is effectively the inner bureaucracy and does not include Alberta Health Services, school boards, universities, municipalities and dozens of other government institutions. These 29,387 employees cost $2.9 billion in salaries, pension contributions and benefits, making the average cost per core-government employee $102,000 a year.

According to Statistics Canada, the average weekly earnings of Alberta’s provincial employees (all of them) have skyrocketed by 17 per cent in just the last five years, coming out of a recession. 

And so with the provincial government on track to post a $3.9 billion deficit and take on another $5 billion in debt this year, raises on this scale cannot be afforded for another five years. Even Doug “I-Can’t-Believe-It’s-Not-Debt” Horner realized this was a problem.

The government drove a hard bargain with teachers and doctors and negotiated fair deals that recognize their work, but also the tough financial position of the province. Doctors and teachers signed on believing that this tough medicine would be equitably shared until the province was on a sound financial footing again.

It certainly looked just that way as the government introduced Bill 46 to legislate an agreement after AUPE Poobah’s walked away from the negotiating table. Horner was rightfully worried that binding arbitration would again award overly generous raises. But the government overplayed its hand and also introduced Bill 45, which outlawed even discussions about going on strike. 

The draconian measures of Bill 45 allowed AUPE to tie it easily enough to the more reasonable Bill 46.

The Wildrose Opposition didn’t exactly strengthen the government’s negotiating hand either, siding with the union. 

The Court of Queen’s Bench struck down Bill 46, ruling that if government employees are not legally allowed to strike, then they must have the option of binding arbitration if no agreement can be mutually agreed upon.

And with that, the government tucked-tail and ran. While the province goes further into debt every year, it will dish-out lump sum payments of $1,850 per employee in the first year, and award a 6.75 per cent salary increase over the following three years. After taking what appeared to be a hard line with AUPE, they ended up walking away with more than they likely would have had the government just bargained hard – but in good faith – in the first place. 

Now, it’s an unmitigated labour-negotiation defeat for the government.

Teachers and doctors who signed onto much less generous agreements should be left wondering why they did their part. 

Moving forward, the province should amend the legislation governing binding arbitration to reflect the fiscal realities of the province. Arbiters in the private sector generally do not award raises when a company is hemorrhaging money or is unprofitable. Similarly, arbiters should be required to reduce pay or at least hold the line when the current revenue and spending framework is leading to a growing debt.

In the meantime, balancing Alberta’s budget just got harder.