Attacks on Teachers, Airline Workers, and Public Pensions in Canada Highlight Need for a Fighting Labor Movement
by Roger Annis
A trend is taking hold across Canada of working class resistance to the capitalist crisis and attacks by governments and corporations on workers' rights and the social wage. Library workers in the city of Toronto and transit and university workers in Halifax recently went on strike, as did daycare workers in Quebec. Workers at Air Canada have staged a series of protests and strikes in the past year. Teachers and students in British Columbia recently struck for better education, while in Quebec students are waging a spectacular mass campaign against rises in post-secondary tuition fees. Provincial government workers are restive.
Some 300,000 government service workers in British Columbia are bargaining a new collective agreement and saying no to the same wage and services freeze the government is seeking to impose on teachers. The government of Ontario recently delivered a budget that aims to cut billions of dollars in services and thousands of jobs. Equally noticeable is the lag in organizing the broad solidarity necessary for these struggles to win. This article examines the two sides of a dynamic and unfolding reality.
Teachers Defend Education
The 41,000 members of the BC Teachers' Federation (BCTF) are in the midst of a bitter collective bargaining confrontation with the provincial government. They are fighting a two-year salary freeze that the Liberal government is seeking to impose. They also want to win back the right to bargain class sizes and other aspects of their work that directly affect the quality of the education they provide. Teachers began job action at the beginning of the school year, last September, declining to participate in voluntary activities and cooperate with administrators, including refusing to fill out report cards. Job action escalated into a three-day strike beginning March 5 when the government announced it would impose a draconian law to strip away the right to strike and send disputed issues to a skewed "mediation" process. Bill 22 says mediation must correspond to the government's guideline of a two-year, "net zero" increase to education spending. The bill was passed into law on March 17. It imposes stiff penalties on the union and individual teachers for strike or other job action. Further strike action appears unlikely. The union is mulling participation in the government's mediation, something it said earlier it would not do. It recently announced it would mount a major effort over the coming year to unseat the government. The next provincial election will take place in May 2013. Support for the teachers' struggle has been very strong in the province, including a province-wide strike by secondary school students on March 2. But it has been lacking from other unions. Notwithstanding the fact that the government and its popularity is "in free fall," according to the BCTF and confirmed by recent polls, the broader labor movement in the province has not mobilized in support of teachers. The BCTF expects it will get a more sympathetic ear should the opposition New Democratic Party get elected in 2013. The trade union-based party is leading the Liberals in the polls by a huge margin. But its leaders have stated they will not repeal Bill 22 and they have not said if and how they would satisfy teacher/parent/student grievances.
Airline Workers Get Hammered
Airline workers in Canada suffered a blow on March 18 and 19 when the aircraft maintenance company AVEOS staged a bankruptcy that has thrown some 2,600 highly skilled workers out of work in Montreal, Winnipeg, and Vancouver. The company said it is out of money and may not even meet its salary and pension obligations to workers.The flagrant abuse of this bankruptcy spectacle has angered and offended the people of Quebec in particular. About 1,800 of the affected workers are in Montreal. For several days following the bankruptcy announcement, AVEOS workers protested and blocked traffic leading into the corporate offices of Air Canada in the city.On March 21, the National Assembly of Quebec (provincial government) passed a resolution unanimously demanding the federal government undertake "all possible legal recourse" to keep the AVEOS facility open. Talks and legal actions are underway to revive some or all of the shuttered AVEOS/Air Canada operation, including using money from the state-assisted Solidarity (capital investment) Fund of the Quebec Federation of Labour.In British Columbia, the legislative assembly unanimously adopted a resolution in early April that asks the federal government to accord to the AVEOS facility in Vancouver whatever job protection might be won in other cities.
Declining Conditions of Airline Workers
AVEOS was created in 2007 by Air Canada, the largest airline in the country. It was a spinoff of a portion of its aircraft maintenance division. The airline shifted its heavy maintenance work to the shadow company while keeping its line maintenance in house. ("Heavy maintenance" is the major overhaul that aircraft routinely require in order to remain safe to fly. "Line maintenance" is the repair and maintenance required by aircraft while in service, typically retained by airlines for reasons of quality control and speed of service.)Around the time that AVEOS was created, Air Canada purchased a heavy maintenance aircraft repair facility in El Salvador, where wages are about 15 percent of what the company pays in Canada. Although that facility became part of AVEOS, its ownership structure was jerry-rigged to keep it unaffected by a future 'bankruptcy' of its parent. The airline thus became well placed to shift its heavy maintenance elsewhere for a fraction of the cost.The moves to offload maintenance of aircraft were only the latest in a series of steps by investors to loot Air Canada of its accumulated value following the privatization of the airline in 1988. Among the many moves that have earned hundreds of millions of dollars for the directors and shareholders of Air Canada since its privatization are: Lowering of salaries and benefits of operations workers (cleaning, baggage handling, handing of planes at terminals, etc.) through a two-tier system of remuneration of new hires. Expansion of part-time and on-call work wherever possible. Purchase of Air Canada's largest competitor, Canadian Airlines, in 2001 and then declaration of insolvency in 2003 to liquidate debt from that and other acquisitions. Sale in the early 2000s of Air Canada's engine repair shops to a foreign buyer specializing in that work.Sale of the flyer rewards division of the airline. Creation of a short-haul (under three hours of flying), lower-wage division of the airline, called "Jazz." The gradual breakdown of common bargaining among the three or four major unions at the airline.Other attacks on Air Canada workers are taking place simultaneous to the AVEOS shutdown, notably against the right to bargain collective agreements. Beginning last year, the federal government now routinely outlaws strikes at the airline. Bargaining in 2011 prompted job actions by two of the three major unions at Air Canada -- the Canadian Autoworkers Union (ticket agents) and the Canadian Union of Public Employees (flight attendants) -- but they also prompted anti-strike laws. No significant protest was mounted either by the affected unions or by the broader labor movement. Negotiated agreements with the CAW and CUPE included a new, lower-tier pension for new employees. This year, the government threatened the same anti-strike measure against the International Association of Machinists and Aerospace Workers (IAM) and its pilots association. Talks with the IAM are currently in mediation where the CAW/CUPE pattern will weigh heavily. Looming over the entire situation at the airline is the threat of a repeat performance of the 2003 bankruptcy. This could set the stage, as in 2003, to pressure workers for more wage and benefit concessions. Air Canada has unfunded pension obligations of more than $2 billion for its past and present employees.
Attack on Canada's Public Pension Plan
On March 29, the Conservative government that was re-elected with a parliamentary majority last year announced an unprecedented attack on Canada's public pension plan. The measure was contained in a budget projection that also targets cuts of key public services and several tens of thousands of jobs. If the pension measure passes through Parliament, the age of eligibility of the second tier of the pension plan, Old Age Security, will pass from age 65 to 67. OAS pays some $550 per month to pension earners of annual incomes below $69,000. An earlier attack in 2009 increased the penalties for those drawing the first tier of the national pension, the Canada Pension Plan (CPP), before the age of 65. Those drawing CPP at the earliest eligible age, 60, for example, will be penalized for life by 42 per cent, compared to the previous 30 per cent. This was a bipartisan attack supported by the then-official opposition party, the Liberals.
Lessons
Some important lessons flow from these current battles. The main one is the need for mass mobilization of workers if employer attacks are to be turned back. The days of relying on good will or favorable court decisions are long past.The public pension situation is instructive. In 2010, pressure from members was building on Canada's unions and their political party, the NDP, to launch a mass campaign to increase benefits of the Canada Pension Plan. This was fueled, in part, by the growing practice of companies (cf. Air Canada) to underfund their employee pension plans.The federal government deflected the mounting pressure by promising to legislate increases to the CPP. But it set a condition on union and NDP leaders: "Don't pressure us with mass actions on Parliament Hill." Union leaders acquiesced, the informal deal was on. Months later, the government reneged, announcing instead a new plan to give tax breaks to employee/employer-funded pension plans that invest in financial markets. In 1985, a mass movement dubbed "grey power" arose when the federal government of the time sought to lessen inflation protection for the public pension plan. No equivalent protest is happening in response to these latest cuts, but that could quickly change. Teachers in BC have learned firsthand the dubious benefit of court appeals as substitutes for strikes or other mass action. An appeal by the BCTF of two anti-union and anti-education laws adopted in 2002 took more than eight years to wind its way through the courts. The BC Supreme Court finally ruled that Bills 27 and 28 violated some of the basic rights of teachers. In the new Bill 22, the government formally repealed Bills 27 and 28 and then placed nearly identical language in the new law!Hospital workers in BC have been similarly disappointed by the courts. In 2004, the provincial government outlawed a province-wide strike of hospital workers and then proceeded to privatize some 8,500 jobs of hospital support staff and cut the wages of all other staff. Three and a half years later, the BC Supreme Court ruled the law illegal. The affected union declared a big victory, but the court's remedy was a miserly financial compensation of a few thousand dollars to those workers who lost their jobs.When AVEOS was created in 2007, every worker at Air Canada feared this was a move to eventually shift heavy maintenance work to lower-wage jurisdictions in other countries. Workers staged protests when the news broke.Leaders of the IAM and of provincial and federal federations of labor made blustery speeches saying the decision would not be allowed to pass. But the speeches ended in one feeble action -- an appeal to a federal court asking it to rule that the creation of AVEOS was in violation of the 1988 Air Canada Public Participation Act. That act was created to soften union opposition to the privatization of Air Canada, then a state enterprise. It directed Air Canada to maintain its "maintenance work" at three facilities -- Montreal, Toronto. and Winnipeg.1
In 2010, a federal judge accepted Air Canada's word that it planned to keep maintenance work in the targeted cities. The judge conveniently ignored a precise interpretation of what "maintenance work" constituted. Incredibly, if the IAM thought that AVEOS was being set up for an eventual downfall, it never said so publicly or acted accordingly. It turns out that Air Canada helped to precipitate the "bankruptcy" of AVEOS by quietly directing its work away from it. The long history of the dismantling of Air Canada -- what can only be described as the looting of a former public enterprise -- goes largely unmentioned by all parties involved.
What Road Ahead for Workers?
Private employers and especially federal and provincial governments are stepping up their attacks on jobs and public services. A more militant and coordinated response is needed by the union movement. All indications show the desire of workers for just such a course. Last year, the Occupy movement was widely hailed. Strike activity is on the upswing. Air Canada workers show the restive mood -- rank and file-initiated strikes and protests have become near commonplace and workers are typically rejecting concession agreements negotiated by their leaders.Working-class resistance has been strongest in Quebec. The social democratic NDP won a landslide victory in the province during the 2011 federal election. A mass student movement is refusing to bow to government threats and has mobilized tens of thousands in the streets.The challenge before the unions is to act as a social movement on behalf of the entire working class and break from the mould of job trusts focused on looking after the narrow interests of their dues-paying members. In the wake of the federal budget that attacked the OAS, newly elected leader of the NDP Tom Mulcair said the party would do "everything possible within the Parliamentary arena" to oppose the budget. But much more is needed. While it is useful to have a voice in Parliament on behalf of workers' interest, current battles will be won in the streets and on the picket lines. That is where attention and solidarity must be directed. Furthermore, all this will help open the door to the political challenge to capitalist rule that is needed and increasingly on the agenda. 1 The Air Canada maintenance facility in Vancouver was not named in the 1988 law because Air Canada only acquired it in 2001 through the purchase of Canadian Airlines.
Roger Annis may be contacted at rogerannis@telus.net
URL: mrzine.monthlyreview.org
Monday, April 16, 2012
Public Worker Pension Assault
Ruling class takes aim at public worker pensions
John Dillon and Glen Brown
Remarks made by Illinois Teachers Retirement system (TRS) Executive Director Dick Ingram became an immediate subject of a recent panel discussion held by the Better Government Association on April 9, 2012, at Loyola University in Chicago.
Two members of the pension committee convened by Governor Quinn had an opportunity to speak about what “we all face” in light of increased pension costs because of the unfunded liability (money now owed and that has not been paid into the fund during several governors’ tenures).
Panelist at the Better Government Association forum on the TRS situation were (left to right) State Rep. Darlene Senger, Henry Bayer (AFSCME), Tyrone Fahner (Civic Committee), and Elaine Nekritz (State Rep.). Substance photo by Todd Mertz. Representatives Darlene Senger and Elaine Nekritz spoke about the nature of the deficit problem and moving forward to make adjustments to the retirement system. Henry Bayer, executive director of the American Federation of State, County and Municipal Employees, AFL-CIO, Council 31, and Tyrone Fahner, president of the Civic Committee of the Commercial Club of Chicago were also present.
Fahner was quick to remind everyone in the audience that “out of a sense of responsibility to his membership, Mr. Dick Ingram, head of the TRS, has admitted to the pension system’s insolvency”; that the “real numbers were hidden.”
Rank-and-file members from the public unions in the room were silent, not out of surprise but because once again they were hearing Ingram’s words being used to make a case that “cuts” to the current teachers and, quite possibly the retirees, were necessary, despite the constitutional provision that protects such changes.
When asked “what are the limits of pension reform? Where must we stop because of the constitution,” Fahner replied that “the only limits are that we can’t take what’s already been earned. That would be inappropriate and unconstitutional.” Nonetheless, Fahner said that changes going forward can be “frozen” or “changed”; that Chief Legal Counsel to Illinois Senate President John Cullerton and Parliamentarian of the Illinois Senate “Madiar is wrong” about his analysis regarding a current employee’s vested right when he or she enters the pension system. He also said “if we do nothing, everyone is screwed.”
Senger added “SB 512 wasn’t unconstitutional. It wasn’t taking away benefits. We have a system that is failing” and “every time you delay a solution, it becomes costly.” Senger also declared that the employer (school district) should pay the normal costs since the employer makes the contracts, and that “the COLA is the problem” and “should be suspended like in Rhode Island.”
The Chicago Tribune had cited Ingram a few days earlier: “With insolvency looming in as little as 17 years, the head of the state’s largest pension fund is a warning that pension benefits promised to teachers, starting with those already retired, may need to be cut” (Teachers and pension cuts. Chicago Tribune 4 April 2012). Another article by Chris Wetterich in the Springfield’s State Journal Register had quoted Ingram: “What we are saying is that the number is so bad that you have to start having those conversations. The reality is that if you look at the pension math, the single biggest cost is the COLA” (31 March 2012).
The reactionary firestorm was to be expected. Rank-and-file, as well as the IFT and AFCSME, were shrill in their condemnations of Ingram’s sudden and unexplained change. The Illinois Education Association likewise responded but with close connections to the TRS (the president of IEA is also a TRS trustee): “It’s important to understand that the current situation is very serious but capable of being resolved. TRS, SURS, and other state systems can be saved, but we need to understand that it will not be easy or inexpensive."
Meanwhile, Ingram has been eager to make clear that his statements were a warning regarding what would happen as a result of the state’s failure to fund or lessen the funding to the teachers’ pension. Those were, according to Ingram, the reasons for the stress tests conducted by Buck Consultants. In short, his words were being used “out of context.” To make this even more clear, Ingram printed a clarification in the Chicago Tribune’s Voice of the People on Tuesday, April 10 that stated: “Neither I nor the Teachers Retirement System is proposing any changes in member benefits, especially a reduction in the current annual cost-of-living adjustment… It is not our role at TRS to suggest a solution to this problem.”
Nevertheless, in the same editorial, Ingram once again warns that he has told his board that significant changes must occur in order to avoid insolvency, and these changes need come from newly-generated revenue sources. He further said “Any of these significant changes can only be made by the General Assembly.” For the media, Ingram outlined the “possible areas where lawmakers may look for a solution. There are only a few options available, and none are very pleasant to discuss – changes in the cost-of-living adjustment, in member contributions, in retirement age and in the benefit formula, as well as increased revenues through taxes.”
When the question of finding revenue rather than cutting pension benefits was asked, Senger’s immediate response was “giving an ‘over-spender’ [the State of Illinois] more money is not an answer.” Fahner then asked the audience in the forum: “Do you want your taxes to go up?” While no one wants an increase in taxes, and most people want an equitable and fair taxation for all, Fahner reminded the audience that under Illinois’ current tax structure, they [the middle class] would take the brunt of any increase). Bayer countered that Fahner “wants to fix the pensions and roll back $6 billion worth of taxes” on the wealthy and corporations.
When asked “are taxpayers going to take another hit?” Nekritz responded that “we knew that the [income] tax increase wasn’t going to solve the pension problem.” When asked whether the retirement age for current teachers be raised, Senger, Nekritz and Fahner said “yes”; Bayer said “no.” When asked whether the COLA be a part of the pension solution? Senger, Nekritz and Fahner said “yes”; Bayer said “no.” When asked whether the state should pay what it owes, all of them said “yes.”
They will not be the establishment of a broader tax base so rates are “lower in order to minimize the impact…” and because a broader tax base offers “diversification since it spreads the burden of taxation among more payers than a narrow basis does” (National Conference of State Legislatures).
They will not be the taxation of services to increase needed revenue despite the fact that “the tax system in the State of Illinois does not reflect today’s economic realities” (Chicago Metropolitan Agency for Planning) and the State of Illinois taxes less than one-third of the 168 potentially-taxable services (Center on Budget and Policy Priorities).
Moreover, it will not be the elimination of welfare for the rich even though “the State of Illinois is among 10 states in the nation with the highest taxes paid by its poorest citizens at 13 percent” (the Institute on Taxation and Economic Policy), and one of the few states where the top five percent of income earners pay the least amount of sales, excise, property and income taxes because of federal deduction offsets or regressive tax loopholes from itemized deductions, such as capital gains tax breaks and deductions for federal income taxes paid that are coupled with a flat-rate structure (the Institute on Taxation and Economic Policy). They will be suggestions to cut the constitutional benefits of teachers, however.
John Dillon and Glen Brown
Remarks made by Illinois Teachers Retirement system (TRS) Executive Director Dick Ingram became an immediate subject of a recent panel discussion held by the Better Government Association on April 9, 2012, at Loyola University in Chicago.
Two members of the pension committee convened by Governor Quinn had an opportunity to speak about what “we all face” in light of increased pension costs because of the unfunded liability (money now owed and that has not been paid into the fund during several governors’ tenures).
Panelist at the Better Government Association forum on the TRS situation were (left to right) State Rep. Darlene Senger, Henry Bayer (AFSCME), Tyrone Fahner (Civic Committee), and Elaine Nekritz (State Rep.). Substance photo by Todd Mertz. Representatives Darlene Senger and Elaine Nekritz spoke about the nature of the deficit problem and moving forward to make adjustments to the retirement system. Henry Bayer, executive director of the American Federation of State, County and Municipal Employees, AFL-CIO, Council 31, and Tyrone Fahner, president of the Civic Committee of the Commercial Club of Chicago were also present.
Fahner was quick to remind everyone in the audience that “out of a sense of responsibility to his membership, Mr. Dick Ingram, head of the TRS, has admitted to the pension system’s insolvency”; that the “real numbers were hidden.”
Rank-and-file members from the public unions in the room were silent, not out of surprise but because once again they were hearing Ingram’s words being used to make a case that “cuts” to the current teachers and, quite possibly the retirees, were necessary, despite the constitutional provision that protects such changes.
When asked “what are the limits of pension reform? Where must we stop because of the constitution,” Fahner replied that “the only limits are that we can’t take what’s already been earned. That would be inappropriate and unconstitutional.” Nonetheless, Fahner said that changes going forward can be “frozen” or “changed”; that Chief Legal Counsel to Illinois Senate President John Cullerton and Parliamentarian of the Illinois Senate “Madiar is wrong” about his analysis regarding a current employee’s vested right when he or she enters the pension system. He also said “if we do nothing, everyone is screwed.”
Senger added “SB 512 wasn’t unconstitutional. It wasn’t taking away benefits. We have a system that is failing” and “every time you delay a solution, it becomes costly.” Senger also declared that the employer (school district) should pay the normal costs since the employer makes the contracts, and that “the COLA is the problem” and “should be suspended like in Rhode Island.”
The Chicago Tribune had cited Ingram a few days earlier: “With insolvency looming in as little as 17 years, the head of the state’s largest pension fund is a warning that pension benefits promised to teachers, starting with those already retired, may need to be cut” (Teachers and pension cuts. Chicago Tribune 4 April 2012). Another article by Chris Wetterich in the Springfield’s State Journal Register had quoted Ingram: “What we are saying is that the number is so bad that you have to start having those conversations. The reality is that if you look at the pension math, the single biggest cost is the COLA” (31 March 2012).
The reactionary firestorm was to be expected. Rank-and-file, as well as the IFT and AFCSME, were shrill in their condemnations of Ingram’s sudden and unexplained change. The Illinois Education Association likewise responded but with close connections to the TRS (the president of IEA is also a TRS trustee): “It’s important to understand that the current situation is very serious but capable of being resolved. TRS, SURS, and other state systems can be saved, but we need to understand that it will not be easy or inexpensive."
Meanwhile, Ingram has been eager to make clear that his statements were a warning regarding what would happen as a result of the state’s failure to fund or lessen the funding to the teachers’ pension. Those were, according to Ingram, the reasons for the stress tests conducted by Buck Consultants. In short, his words were being used “out of context.” To make this even more clear, Ingram printed a clarification in the Chicago Tribune’s Voice of the People on Tuesday, April 10 that stated: “Neither I nor the Teachers Retirement System is proposing any changes in member benefits, especially a reduction in the current annual cost-of-living adjustment… It is not our role at TRS to suggest a solution to this problem.”
Nevertheless, in the same editorial, Ingram once again warns that he has told his board that significant changes must occur in order to avoid insolvency, and these changes need come from newly-generated revenue sources. He further said “Any of these significant changes can only be made by the General Assembly.” For the media, Ingram outlined the “possible areas where lawmakers may look for a solution. There are only a few options available, and none are very pleasant to discuss – changes in the cost-of-living adjustment, in member contributions, in retirement age and in the benefit formula, as well as increased revenues through taxes.”
When the question of finding revenue rather than cutting pension benefits was asked, Senger’s immediate response was “giving an ‘over-spender’ [the State of Illinois] more money is not an answer.” Fahner then asked the audience in the forum: “Do you want your taxes to go up?” While no one wants an increase in taxes, and most people want an equitable and fair taxation for all, Fahner reminded the audience that under Illinois’ current tax structure, they [the middle class] would take the brunt of any increase). Bayer countered that Fahner “wants to fix the pensions and roll back $6 billion worth of taxes” on the wealthy and corporations.
When asked “are taxpayers going to take another hit?” Nekritz responded that “we knew that the [income] tax increase wasn’t going to solve the pension problem.” When asked whether the retirement age for current teachers be raised, Senger, Nekritz and Fahner said “yes”; Bayer said “no.” When asked whether the COLA be a part of the pension solution? Senger, Nekritz and Fahner said “yes”; Bayer said “no.” When asked whether the state should pay what it owes, all of them said “yes.”
In seven days, the pension committee will send its recommendations to Governor Quinn. They will not include increases in revenue such as a graduated income tax that has been recommended by the Center for Tax and Budget Accountability, the Center on Budget and Policy Priorities, the Center for Economic Policy and Research, the Institute on Taxation and Economic Policy, the National Conference of State Legislatures, the Chicago Metropolitan Agency for Planning, and United for a Fair Economy, et al.
They will not be the establishment of a broader tax base so rates are “lower in order to minimize the impact…” and because a broader tax base offers “diversification since it spreads the burden of taxation among more payers than a narrow basis does” (National Conference of State Legislatures).
They will not be the taxation of services to increase needed revenue despite the fact that “the tax system in the State of Illinois does not reflect today’s economic realities” (Chicago Metropolitan Agency for Planning) and the State of Illinois taxes less than one-third of the 168 potentially-taxable services (Center on Budget and Policy Priorities).
Moreover, it will not be the elimination of welfare for the rich even though “the State of Illinois is among 10 states in the nation with the highest taxes paid by its poorest citizens at 13 percent” (the Institute on Taxation and Economic Policy), and one of the few states where the top five percent of income earners pay the least amount of sales, excise, property and income taxes because of federal deduction offsets or regressive tax loopholes from itemized deductions, such as capital gains tax breaks and deductions for federal income taxes paid that are coupled with a flat-rate structure (the Institute on Taxation and Economic Policy). They will be suggestions to cut the constitutional benefits of teachers, however.
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