Alberta Finance Minister Travis Toews didn't wear a costume for Halloween on Thursday, but that didn't make him any less frightening. At least for public sector workers.

For them, he's Freddy Krueger but with sharper razors.

And those razors might be getting even sharper in the months to come.

Toews suggested Thursday that if the 180,000 public sector workers now entering arbitration receive a wage increase, he will have to make deeper cuts to the public service.

"If there's wage increases through arbitration, then we're going to have to deal with that somehow," Toews told reporters on the way into the legislature. "Obviously our total remuneration, total cost of public service, is a function of volume times price. So, if the price goes up we may have to look at further reductions in the public service."

Toews reiterated his argument that the province simply has no money for a wage hike.

So, if the "price" of the public service goes up, the "volume" of the public service will have to come down.

Choice of cuts

Put another way, if public sector unions — representing a wide swath of workers including nurses, teachers, social workers and jail guards — successfully press for wage hikes in their current round of arbitration, their success will be short-lived. The government will consider reducing the size of the public service beyond the 7.7 per cent announced in last week's provincial budget.

It's jobs versus wages.

It's not an overt threat, perhaps. More along the lines of, "That's a nice public service you've got there. Be a pity if anything happened to it."

But unions will see it as a choice between being punched in the face or kicked in the groin.

Toews is hoping the arbitrators will take the government's position into account, a position that changed significantly over the past week. When presenting his budget last week, Toews said simply that there was no money for wage hikes.



On Tuesday this week, he abruptly announced that the government was now seeking wage rollbacks that range from two per cent to five per cent, depending on the various contracts under discussion.

Predictably, the unions erupted with outrage, pointing out that their members had seen their wages frozen for years and this was the year they had expected to start playing catch-up.

Guy Smith speaks at an AUPE rally in July in downtown Edmonton. (Emilio Avalos/Radio-Canada)

Guy Smith, president of the Alberta Union of Provincial Employees, Alberta's largest union, said his members are furious and ready for a labour war.

"Over 1,000 AUPE activists gathered at our recent convention in Edmonton," said Smith. "They unanimously endorsed a resolution to fully support any groups of members that take direct action against their employer."

The unions protested that Toews was trying to box them into a corner, and paint them as the bad guys, by presenting the government's bargaining position publicly.

The United Nurses of Alberta filed a complaint with the Alberta Labour Relations Board on Thursday.

"Employers cannot legally move backward on bargaining positions previously tabled in negotiations, particularly as they are sitting on an accumulated surplus of more than $1.3 billion," said David Harrigan, the UNA's director of labour relations.

But the government doesn't care.

During a Facebook town hall this week, Premier Jason Kenney ridiculed the unions' bargaining positions, criticizing some of them for wanting a wage hike: "I believe that the request from the big government union bosses for a six and seven per cent raise this year is out of touch with reality."

No-win situation

Not all unions are asking for that kind of hike, but that doesn't matter to Kenney's narrative. Interestingly, he's careful not to point fingers at the workers themselves but rather at the "big government union bosses."

In this narrative, Kenney is standing up for all Albertans, the union bosses are standing up only for themselves.

It's a cynical and grossly misleading strategy. But it will no doubt be effective, especially with his conservative supporters who, for reasons fiscal and political, are no friend of public sector unions.

By talking of wage cuts, allowing the hiring of replacement workers during a public sector strike, and planning to unilaterally rip up a contract agreement with physicians, Kenney has riled up the unions, angered doctors and set the stage for labour strife in Alberta's public sector.

But there is method to his mayhem.

Kenney is setting the stage for a showdown with the union leadership by putting them in a no-win situation.

If they back down, they'll face the wrath of their members.

If they push for wage hikes, they'll be painted as pampered and out-of-touch with fiscal reality. And the government will blame them for further cuts and more layoffs in the future.

The government will be the one holding the knife, but accusing the unions of doing the slashing.

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