Death by a thousand cuts: Teachers, airline workers and Canada's public pensions

| April 12, 2012
March 27 demonstration against Aveos. Photo: Karl Nerenberg

Government attacks against worker rights and the social wage are threatening hard-earned gains and advances for workers in Canada on many fronts and in many incremental ways. In this two-part series, we will look some of these struggles and what is at stake, with Part 1 focusing on the teachers' union in British Columbia, airline workers and the public pension. Part 2 takes a look at what must be done if we are to protect individual, public and social rights in Canada.

B.C. teachers defend education

Currently, the 41,000 members of the BC Teachers Federation (BCTF) are locked in a bitter collective bargaining dispute with the provincial Liberal government. On the table is a two-year salary freeze that the government is seeking to impose and the right to bargain, class sizes and other aspects of teachers' work in the classroom.

The first action took place at the beginning of the school year, last September, when teachers refused to participate in voluntary activities and co-operate with administrators, including filling out report cards. When the government announced it would impose a draconian law to strip away the right to strike and send disputed issues to a skewed mediation process, teacher resistance escalated into a three-day strike March 5 to 7.

Regardless, Bill 22 was passed into law on March 17. It says "mediation" must correspond to the government's guideline of a two-year, "net zero" increase to education spending. It also imposes stiff penalties on the union and individual teachers for strikes and related actions.

Unsurprisingly, further strike actions this school year appear unlikely. The union is even mulling participation in the government's mediation, something it had said it would not do.

Support for the teachers has been exceptionally strong throughout this battle. Students held a province-wide strike in support of the teachers on March 2. According to the BCTF, the popularity of the government is "in freefall." This is echoed by commentators and recent polls.

The tenacity of teachers and the breadth of support is heartening, but broader labour support that would permit teachers to comfortably defy Bill 22 has been absent. The only recourse for the BCTF at this point is to mount a major effort over the coming year to unseat the government when the next provincial election takes place in May 2013, which it has said it will do.

Polls have the opposition New Democratic Party is leading the Liberals by a huge margin. But will the election of the NDP halt the decline in education services, including the sharp rise in "on-call" teaching positions (now close to 25 per cent of the workforce, according to a recent Vancouver Sun article)? The NDP has said it will not repeal Bill 22 nor has it said if and how it would satisfy teacher/parent/student grievances.

Airline workers get hammered

Airline workers in Canada suffered a blow on March 18 and 19 when the aircraft maintenance company AVEOS staged a bankruptcy, throwing some 2,600 highly skilled workers out of work in Montreal, Winnipeg and Vancouver. The company initially said it is out of money and may not even meet its salary and pension obligations to workers. (AVEOS' financial and ownership structure is something of a mystery, bound into the secretive world of corporate greed and larceny.)

This bankruptcy spectacle angered and offended workers in Quebec, in particular, where about 1,800 are based. For several days following the announcement, AVEOS workers protested and blocked traffic leading into the corporate offices of Air Canada in Montreal. On March 21, the provincial National Assembly of Quebec passed a unanimous resolution demanding that the federal government undertake "all possible legal recourse" to keep the AVEOS facility open.

Talks and legal action are underway to revive some or all of the shuttered AVEOS/Air Canada operation, including using financing from the state-assisted Solidarity Fund of the Quebec Federation of Labour. On April 5, a Quebec judge ordered that assets from the bankrupted enterprise be used to pay unpaid wages, to a maximum of $2,000. Apparently, there will be no severance pay.

AVEOS was created in 2007 by Air Canada, the largest airline in the country. The airline spun off its heavy maintenance work to the shadow company while keeping its line maintenance in-house. ("Heavy maintenance" refers to major overhauls routinely required in order to remain safe to fly. "Line maintenance" is the repair and maintenance required by aircraft while in service, typically retained by airlines for reasons of quality control and speed of service.)

At the same time that AVEOS was created, Air Canada purchased a heavy maintenance aircraft repair facility in El Salvador, where wages are about 15 per cent of what the company pays in Canada. Although that facility became part of AVEOS, its ownership structure was jerry-rigged to keep it unaffected by any future bankruptcy of its parent.

The move to offload aircraft maintenance was one in a series of steps by investors to profit from the privatization of the airline in 1988. These included:

- Lowering salaries and benefits of operations workers (baggage handling, cleaning and servicing of aircraft at terminals) through a two-tier system of remuneration of new hires.

- Expanding part-time and on-call work wherever possible.

- Purchasing Air Canada's largest competitor, Canadian Airlines, in 2001 and then declaring insolvency in 2003, thus liquidating debt from that and other acquisitions.

- Selling Air Canada's engine repair shops to a foreign buyer specializing in that work.

- Selling Air Canada's flyer rewards division.

- Creating Jazz, a short-haul (under three hours of flying), lower-wage division of the airline.

- Gradually breaking down common bargaining among the unions at the airline.

Attacks on Air Canada workers continue to take place simultaneous to the AVEOS shutdown, notably against the right to bargain for collective agreements. Beginning last year, the federal government now routinely outlaws strikes at the airline. In 2011, bargaining prompted job actions by two of the three major unions at Air Canada: the Canadian Autoworkers Union (3,800 sales agents) and the Canadian Union of Public Employees (6,800 flight attendants), but those actions also prompted successive anti-strike laws or threats. No significant protest of the government's actions was mounted by the affected unions or the broader labour movement.

Negotiated agreements with the CAW and CUPE included lower-tier pensions for new employees. This year, the government threatened anti-strike measures against the International Association of Machinists and Aerospace Workers (IAM, 8,600 operations workers) and the 3,000 pilots. Talks with the IAM are currently in mediation where the CAW/CUPE pattern will weigh heavily.

Looming over the entire situation at the airline is the threat of a repeat performance of the 2003 bankruptcy. This would set the stage to pressure workers for further wage and benefit concessions. Meanwhile, Air Canada has unfunded pension obligations of more than $2 billion for its past and present employees.

Attack on Canada's public pension plan

On March 29, the Conservative government that was re-elected with a parliamentary majority last year announced an unprecedented attack on Canada's public pension plan. The measure was contained in a budget projection that cuts key public services and several tens of thousands of public service jobs.

If the pension measure passes through Parliament, the age of eligibility of the second tier of the national pension plan, Old Age Security, will pass from age 65 to 67. OAS pays some $550 per month to pension earners of annual incomes below $69,000.

An earlier attack in 2009 increased the penalties for those drawing the first tier of the national pension, the Canada Pension Plan (CPP) prior to the age of 65. For example, those drawing CPP at the earliest eligible age, 60, will be penalized for life by 42 per cent, compared to the previous 30 per cent. This was a bipartisan attack supported by the then-official opposition party, the Liberals.

A solid majority of Canadians support improvement to the social wage. A just-released survey by the Broadbent Institute shows that more than 80 per cent of Canadians want higher taxes for the wealthy individuals and corporations; 64 per cent would themselves pay more if it meant protecting social programs. In 1985, a then-Conservative government sparked a significant protest movement dubbed "Grey Power" when it threatened to reduce inflation protection of the public pension plan. This time, however, the latest attack on the OAS was met with a press release by the union-backed Canadian Association of Retired People expressing "disappointment" at the government decision.

Roger Annis is a retired aerospace worker in Vancouver, B.C. He can be reached at rogerannis@hotmail.com.

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