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The Manitoba government introduces wage freeze legislation; but is it enough?

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Issue: The province’s net debt has nearly doubled over the last decade, and the deficit is projected to be $840 millionthis year. Not surprisingly, the province’s credit rating was recently downgraded.

Manitoba small business owners know that today’s deficits are tomorrow’s taxes, and they have made it clear that the province needs to get back to balanced budgets. In fact, 75 per cent of Manitoba entrepreneurs cite government debt and deficit as a serious concern to their business.

With labour costs accounting for about 70 per cent of the provincial budget, this is the logical place to start looking at bending the cost curve. CFIB surveys reveal 90 per cent of small business owners believe the province should reduce spending to return to balanced budgets, and 98 per cent want to see the size of government reduced through workforce attrition.

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Source: CFIB, 2017-18 Manitoba Budget Survey, November 2016, n=285.

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Source: CFIB, 2017-18 Manitoba Budget Survey, November 2016, n=285.

Action:  CFIB has been very vocal on the need for the Manitoba Government to bring wages & benefits to levels comparable with private sector norms; especially by narrowing the public-private sector wage gap, 19.5 per cent for Manitoba provincial public sector workers, and reducing the size of government. We made this clear when we met with the Finance Minister on January 30th.

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Source: CFIB, Wage Watch Report, February 2015.

Result: On March 20th, the provincial government took a good first step to curb Manitoba’s unsustainable labour spending by tabling The Public Services Sustainability Act. The Act will freeze wages of provincial employees for two years, followed by a 0.75 per cent increase in year three, and a 1.0 per cent increase in year four. The changes will not take effect until the existing collective bargaining agreements expire for their respective unions; so they will be phased in for all labour groups over the next three years. 

While this is a good step forward, it doesn’t go far enough to correct unsustainable labour spending trends. The province still needs to reduce the size of government through workforce attrition.

Next Steps: CFIB will continue to push the government to keep labour cost spending growth to sustainable levels and to reduce the size of government.

If you have any other questions, please contact CFIB Business Resources at [email protected] or 1-888-234-2232.

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