Cutting straight to the bone: Austerity and Manitoba crown corporations

August 5, 2023

Previously published in the Winnipeg Free Press on August 5, 2023

On July 19, workers at Manitoba Liquor and Lotteries (MBLL) began rotating strike action after contract negotiations between Manitoba Government and Generals Employees’ Union (MGEU), who represents 1400 workers at Liquor Marts and liquor distribution centres, and MBLL stalled.

At issue in contract negotiations is the latest bargaining mandate introduced by the Premier and her cabinet, restricting MBLL to offer staff two percent wage increases per year for four years. On the heels of a four-year wage freeze and two years of high inflation, two percent per year is nowhere near enough to make up for the real wage losses these workers have experienced over the last six years. Some MBLL workers are now leaving the crown corporation for better wages at Walmart and Sobeys.

The breakdown of contract negotiations at MBLL due to provincial government mandates provides just the latest example of the penny-wise and pound-foolish cost-cutting agenda that has plagued Manitoba’s three largest crown corporations for the last seven years.

Since 2016, the Province has made repeated interventions at Manitoba Hydro, Manitoba Public Insurance, and Manitoba Liquor and Lotteries that have prioritized spending cuts and private profit-making over service quality and safety, leading to two strikes at Manitoba Hydro in recent years and likely job action by MPI workers soon.

As part of the forthcoming book: Public Service in Tough Times: Working Under Austerity in Manitoba (UM Press), a survey of 130 crown employees asked how their work has changed since 2016. The survey found that budget restraint has reduced service quality, diminished safety, and harmed workplace morale.

76 percent of crown corporation staff said their workload had intensified since 2016. As one Hydro employee put it: “Workload has increased as there are no longer proper staffing levels for the hours required to complete all work, resulting in worker fatigue and burnout. Jobs are pushed to following years or ignored, and at times shortcuts are taken.”

Following mandates in 2017 to reduce staff, employees at Hydro, MPI, and MBLL have been repeatedly asked to do more with less as the work of departing staff or vacant positions have fallen into the laps of those who remain. The confusion and stress this has created, alongside mandated wage freezes, have spurred on further resignations. 86 percent of survey respondents believe austerity has worsened employee recruitment and retention.

In terms of safety, Hydro workers noted delayed maintenance and cut corners becoming a common issue since the onset of austerity in 2016. As one Hydro lineman stated: “neglecting maintenance and maintaining low staff levels is courting disaster in the future once the infrastructure starts failing and we’ll be at the mercy of contractors with too few staff.”

Workers repeatedly pointed to the long-term costs of poor maintenance and fixing faulty work by contractors as evidence of the dubious claim that austerity saves money.

The out-of-control budget of Project Nova at MPI has put the true costs of overreliance on private contractors on full display. Across Hydro, MPI, and MBLL workers noted more contractors were doing work previously done by crown staff, with many pointing out that crown staff must supervise or train contractors, again increasing costs.

This employee’s observations succinctly state what happens when austerity runs its course: “I am a conservative at heart and I fully agree with ‘trimming the fat’. However, you do need a small amount of ‘fat’ to protect the core. Pallister cut the fat, and then went straight on to the bone. You cannot continue to undervalue the people providing the services necessary to keep this province running. What you will end up with is qualified and skilled people changing professions or retiring early because they are fed up. What you will be left with is staff that are ill-equipped to handle the stress/workload and simply quit.”

What is the alternative to austerity and privatization? Staff repeatedly stated that training, good working conditions and stable staff management are fundamental to providing the high-quality service Manitobans expect.

Manitoba’s three largest crown corporations punch well above their weight in terms of the value these government-owned enterprises deliver to Manitobans. While not beyond criticism, these three crown corporations contributed $1.81 billion to the provincial treasury in 2022 while delivering some of the lowest prices in Canada on electricity, liquor and auto insurance. It is high time we give the staff who deliver these goods and services the respect they deserve.

Niall Harney holds the Errol Black Chair in Labour Issues at the Canadian Centre for Policy Alternatives – Manitoba.

Lynne Fernandez is a research associate with the Canadian Centre for Policy Alternatives – Manitoba.