Wednesday, September 17, 2014

Big Win for BC Liberal Government

The full details of the tentative agreement between BCTF and the government have not been divulged, but based on what we know, my sense is that:
- the government got the upper hand on all major issues: salary, signing bonus/grievances, and class size and composition;
- the BCTF had a small advantage on minor issues: non-salary benefits, concessions demanded by the employer.

In the end, there are about $550-600 M in new money over 5 years for salary, benefits, bonus and grievances. This is close to the $600 M that I was suggesting at the end of my previous post, although since I did not include grievances in the $600 M in that post, this deal is more favourable to the government. As for class size and composition, there is very little additional money right away - much less than what I suggested in late August - but the BCTF can renegotiate the language if it wins the court case. However, I'm highly skeptical that the BCTF will gain a lot more at that point, unless the province's fiscal situation markedly improves.

Therefore, overall, this deal is more favourable to the government that what I was expecting. If you're a BCTF supporter, you could argue that this shows that the government was the inflexible party all along. If you're a government supporter, you could argue that this shows that BCTF's original demands were wildly unrealistic. However, one thing's certain: due to the "re-opener" clause on class size and composition, don't be surprised if the five years of promised labour peace fail to materialize.

Detailed analysis below. Note again that Year 1 was last school year (2013-2014).

Salary
Year 1: 0
Year 2: 2%, and additional 1.25% on January 1, 2015 = $71 M
Year 3: no increase = $84 M
Year 4: additional 1% = $111 M
Year 5: additional 0.5%, and further 1% eight months into the school year = $129 M
5-Year Total: $395 M + 50% economic stability dividend
- August government offer: $356 M* + 50% economic stability dividend
- August BCTF demand: $601 M + 100% economic stability dividend
(The agreement also contains a Year 6, with increases structured like in Year 5.)

This is clearly a clear win for the government: for every dollar that it moved, BCTF moved more than $5. In addition, the government got the term and the size of the economic stability dividend that it wanted. However, the immediate 2% increase allows BCTF to save face.
*A previous post estimated this at $350 M on the basis of July 1-June 30 contract years, but I have now switched to September 1-June 30 school years.

Signing Bonus, Grievances
- A one-time $105 M payment to BCTF.
- Immediate increase of elementary preparation time from 90 to 100 minutes, and further increase to 110 minutes on the last day of the contract. (Cost = $9.6 M/year)
- Preparation time for secondary school teachers and adult educators to be examined by a committee.
5-Year Total: $143 M
- August government offer: None (but potentially large grievance liability)
- August BCTF demand: A one-time $375 M payment ($150 M signing bonus plus $225 M grievance fund) and $270 M worth of preparation time (not counting interaction with salary increase) = $645 M

Again, this is a clear win for the government. In fact, one might argue that teachers might be better off with holding out for court-ordered grievances, but that could take years.

Class Size and Composition
- Fund for teacher hiring: $80 M per year (except $75 M in 2014-15, and $85 M in 2018-19). This fund replaces the LIF, which was used for both teacher hiring as well as other improvements.
- Some sources suggest that there's another $80 M (total, or an average of $16 M per year) for other improvements, such as teachers' aides.
- Court case: After it is resolved, either side can reopen class size and composition provisions. Confusingly, they're supposed to bargain from the restored language (if any), but the default until a new deal is reached is the current language.
Average per year: $80-96 M + "re-opener" clause
- August government offer: $75 M per year LIF, and any language restored by the court only applies to past contracts (i.e. would lead to a grievance payout, but no ongoing costs)
- August BCTF demand: $225 M annual fund in addition to LIF, and any language restored by the court takes effect immediately in current contract (costed at $1.6 billion per year by the government)

This is a likely win for the government. Until the court case is resolved (and thereafter if BCTF loses, as I don't think the government would re-open the contract in that case even though they could), it will spend $5-20 M per year more than its original offer, which is much less than the $225 M demanded by BCTF. After a BCTF victory in court, the government would likely be in a position of strength in bargaining: as long as it does not agree to new language, the default is the current language rather than the restored language. Therefore, the government is insured against losing control of its budget.

However, BCTF can rejoice about two things:
- a guarantee that most of the money goes to hiring teachers rather than other forms of improvements, which was not there with the LIF; and
- if it wins the court case, and the fiscal situation has improved by that time, the province would likely agree to put more money into class size and composition. Of course, it is basically impossible that the government will agree to the 1998-2001 language, but at least the door is open to mid-contract improvements.

Other Benefits and Teachers on Call
According to BCTF's letter to members, the ongoing cost of benefits will be $11.85 M per year at the end of the contract, but these benefits will be phased in rather than immediate. There is also an increase in pay for teachers on call somewhat less than $4.6 M per year (which was the August demand).
- August government offer: None
- August BCTF demand: $24.4 M per year (not counting interaction with salary increase)

Here, the two sides met near the midpoint of their original positions, though the final ongoing cost appears closer to the BCTF demand.

Concessions Demanded by Government (Union Leave, Evaluation, Calendar)
All withdrawn, so a win for BCTF, but these are relatively minor issues.

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