Ontario Budget: Austerity for Workers, Tax Cuts for Bay Street

TORONTO, March 25 /CNW/ - Today's provincial budget does little to address the jobs crisis in Ontario, say the United Steelworkers (USW). Indeed, the budget itself projects an even higher unemployment rate this year than last year.

"The only positive surprise is the lower electricity rate for industrial facilities in northern Ontario," observed Wayne Fraser, USW's Ontario Director. "Our union has long advocated using abundant hydro power to support industrial jobs in Canada."

The Northern Ontario Electricity Rate Program will be worth $150 million annually. One of the largest potential beneficiaries is Vale Inco, which has refused to negotiate with its Steelworker employees for eight months.

"Vale can now save more on hydro rates than it could conceivably save through the concessions that it has been trying to impose on our members," said Fraser. "Today's budget should prompt Vale to drop its demands for concessions. In fact, we call on the Ontario government to not approve the reduced electricity rate for Vale unless and until it returns to the bargaining table and negotiates a fair deal."

Despite projecting ongoing inflation, the Ontario government is planning to introduce a two-year pay freeze for public employees. While it will respect existing collective agreements, "the fiscal plan provides no funding for incremental compensation increases for any future collective agreements."

The budget speech pays lip service to post-secondary education as "our great competitive advantage," but the budget restrains transfers to universities to pressure administrators to impose the two-year freeze on university staff when their collective agreements expire.

The United Steelworkers union represents staff at the Universities of Toronto and Guelph. "When our collective agreements expire next year, the employer's opening offer may be a compensation freeze," noted Fraser. "However, our union will seek to negotiate improvements on both campuses."

Although the government claims that restraint is needed to balance the budget, it is pressing ahead with costly, no-strings-attached tax breaks for business. The province is giving up annual revenues of $4.5 billion by indiscriminately removing sales tax from all business inputs, $2.4 billion by slashing the corporate income tax rate and $1.6 billion by eliminating the corporate capital tax.

"By attempting a pay freeze for 1.2 million Ontario workers, the government risks putting downward pressure on wages throughout the provincial economy," said USW economist Erin Weir. "To facilitate the consumer spending needed to sustain an economic recovery, the government should instead be looking for ways to support wages."

For further information: Wayne Fraser, USW Ontario Director, [phone]; Erin Weir, USW Economist, [phone]; Bob Gallagher, USW Communications, [phone] or [phone]