Union’s delight, bean counter’s fright?

Laurie Butterworth's cheerful chortling says it all. The president of the Yukon Employees' Union isn't allowed to discuss details of the proposed collective agreement struck last week with the territorial government until ratification meetings start on May 9.

Laurie Butterworth’s cheerful chortling says it all.

The president of the Yukon Employees’ Union isn’t allowed to discuss details of the proposed collective agreement struck last week with the territorial government until ratification meetings start on May 9.

But Butterworth wouldn’t be so cheerful unless the three-year deal was sweet. And the terms of the deal are evidently generous enough that the union’s negotiators gave it their blessing after a single round of bargaining, which began in late March.

That’s in marked contrast to negotiations with the Yukon Teachers Association, which stalled on the subject of wage hikes and has been sent to binding arbitration.

The future may look bright for the YEU’s 4,000-odd members, whose last collective agreement expired in December.

But it may mean a big headache for the bean counters expected to balance the territory’s budget.

Payroll accounts for one-third of the territory’s spending. So any unplanned costs that come with the new collective agreement are likely to hurt the territory’s plans to post a modest budget this year.

Finance officials have denied stuffing-away extra money to pay for a new collective agreement, but perhaps this claim should be treated with skepticism. After all, broadcasting exactly how large a wage hike they can afford would hurt their bargaining position.

To support this view, the territory’s payroll costs are set to swell over the next year by 11.5 per cent, to $372.1 million. That’s up from an 8.5 per cent increase over the past year.

But if it’s true the new agreement will have to be paid out of the surplus, that will be one more reason to suspect the territory is bound to post another deficit by this time next year.

Wages have typically grown by about three per cent in recent years. If projected spending grows by that much, it would cost the territory an additional $11 million.

And that would blow a hole in the territory’s projected surplus of $2.9 million.

Contact John Thompson at

johnt@yukon-news.com.