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Workers in Atlantic Canada Face Down Austerity

In New Brunswick, 22,000 public-sector workers are struggling against austerity measures put in place by Tory premier Blaine Higgs. His actions are a portent of the austerity measures to come in a post-COVID world.

Thousands of union members and supporters rally outside the New Brunswick Legislature on November 2. (CUPE SCFP / Facebook)

In the face of new demands from bosses for wage cuts, and after twenty years of stagnant pay, workers in Atlantic Canada have had enough. In late October, twenty-two thousand Canadian Union of Public Employees (CUPE) members from ten locals in New Brunswick went on strike. With members working in schools, hospitals, rehabilitation and therapy facilities, courts, and other sectors, these workers represent a broad section of Canadian society.

Since the strike, the union’s members have tentatively returned to work, pending memorandums and a vote by education workers. But New Brunswick’s premier, Blaine Higgs, has been clear that more “changes” are planned. Higgs is a loyal servant of the province’s wealthiest family, which has spent decades helping undercut workers’ pay and benefits.

Premier Higgs’s attack on public-sector workers offers a forewarning of what workers across Canada can expect in the near future. To combat these threats, they must organize now to fend off inevitable post-COVID austerity measures.

Irving Oil and Blaine Higgs

On May 12, 1994, 264 oil workers at the Saint John Irving Refinery unionized with Communications, Energy and Paperworkers (CEP) Union Local 691 and struck against wage cuts, attacks on seniority rights, hours extensions, and more. The regressive demands from management broke the norms of postwar pattern bargaining — management’s retrenchment was a clear attempt to erode foregoing labor gains.

The refinery strike followed closely on the heels of successful efforts by public-sector unions to oppose provincial wage cap legislation in the 1992 general strike. In a July 1996 interview with the Ottawa Citizen, CEP local president Larry Washburn made this connection explicit. “It’s about control,” Washburn said.

You’re seeing it everywhere, in the public sector and in the private sector. This isn’t going to be the last fight, but it’s going to be one of many that’s hard fought to maintain workers’ rights.

Unfortunately, Irving Oil — a key enterprise of one of Canada’s wealthiest families — defeated the refinery strike. The company used scabs, private security, and its friendly relationship with the provincial government to break CEP Local 691’s strike. Its final humiliating offer to the union insisted on the termination of thirty-seven union leaders, activists, and supporters — with many worrying that they would be blacklisted.

One of Irving’s managers during the strike was Blaine Higgs. Higgs was briefly a leadership candidate for the anti-francophone Confederation of Regions Party. Following this stint, he acted as a federal Conservative activist. He joined Irving in the late 1970s, shortly after graduating from university, and stayed with the company for thirty-three years. He would eventually attain the position of Irving Oil’s director of logistics and distribution and business development.

In 2010, Higgs was elected to New Brunswick’s provincial legislature. He soon situated himself as a key player in Premier David Alward’s austerity government, taking the position of finance minister. As he worked to cut 4,500 public-sector jobs, Alward dressed up his right-wing pinchpenny cruelty by invoking boilerplate abstemiousness, telling those attending a board of trade meeting, “Living within our means is about making difficult choices and changing the way government services are delivered.”

Announcing his intent to reduce the province’s contribution to workers’ pensions, Higgs said at a 2013 pre-budget consultation, “Businesses are not investing in the way we need them to in New Brunswick.” In light of the fact that pensioners were living longer, Higgs sought annuity reform in line with these new realities.

When he first ran for premier in 2018, Higgs offered New Brunswick’s citizens an approach to running provincial governments that he had developed from his time at Irving Oil. Promising to run the province as a lean machine, Higgs boasted that he “came from a company where you had to deliver results in order to survive.”

Labor Action

Heading into 2021, the Higgs government announced its intention to freeze wages, vowing “to hold the line.” In late October, the government offered workers a paltry 2.25 percent wage increase over four years — well below the cost of living. Economists have forecasted inflation to approach 5 percent this year alone.

The premier also demanded pension cuts. Higgs’s government sought to add CUPE Local 1253 — representing school bus drivers and others — to the province’s “shared risk” pension scheme. This would exempt the province from the obligation of topping up underfunded pensions. The province’s hospital workers’ shared risk plan explicitly makes cost-of-living increases contingent on the plan’s “funded status.”

As the September 7 deadline approached, the government made it clear to CBC News that it had “contingency plans” in place in case of a strike. Across locals, workers voted 94 percent in favor of industrial action.

By early October, at least one local had gone on strike. By the end of the month, all locals had followed suit. As one observer noted on Twitter, “You can’t walk around Sackville NB today without stumbling into CUPE!”

On October 28, the NB Media Co-op reported that CUPE had set up fourteen strike headquarters and up to eight satellite sites across the province to coordinate picket lines and mobilize members. The union also used its provincial website to post a map detailing all picket line locations across the province, updated daily and with plans coordinated via Signal.

On October 31, the government locked out three thousand CUPE education workers. Polls, meanwhile, showed overwhelming public support for the workers. On November 2, at least five thousand frontline workers, community members, and supporters rallied outside the legislature on the session’s opening day. CTV News reported that the chants of CUPE members and supporters were audible from inside the legislature. 

On November 5, the union held another press conference outside the government building. When Higgs appeared, he was confronted by CUPE members who admonished him for taking away their pensions. The union’s members were unsympathetic to his attempts to ease tensions.

Jacobin contacted Abram Lutes, a coordinator with the Common Front for Social Justice in Moncton, New Brunswick, to discuss the union’s decision to strike:

Over the past year, the disconnect between the rhetoric and the actual treatment of essential workers has been very stark. The cost of living has also risen astronomically across the province and those issues are relatable to most people. This has created a lot of empathy and solidarity.

The reception has been really positive. There’s been a lot of energy that’s supportive of the strike and a realization in popular thinking that regular people have a stake in the strike and most people’s interests are on the side of the workers that are on strike.

Tracy Glynn, an organizer with Solidarité Fredericton, similarly stressed the broad-based appeal of the strike. “On the picket lines you see teachers, you see parents and students. Everybody in this province knows somebody who is affected or is on strike.”

Solidarity actions have taken place in Woodstock, Moncton, and Fredericton, and even in cities outside the province. “Even in smaller communities you’ve seen overwhelming support,” Lutes explains.

Strikebreaking

The strike continued for days, but the provincial government didn’t budge. On November 2, the Higgs administration offered a 2 percent wage increase, but held firm on its demand for “concessions on pensions.” Committed to breaking the strike, he further threatened to impose “back-to-work” laws and a legislated “wage settlement” across the whole public sector. The reason that Higgs took such a tough stance on the strike was that he recognized that the gains the movement won would apply to a large section of New Brunswick’s workers. He even went as far as to admit this, declaring that “whatever we do with CUPE, it will apply to fifty-five thousand employees.”

On November 5 — the day he was confronted by CUPE supporters on the steps of the legislature — Higgs conceded that his government had to reach a settlement. Climbing down from his earlier position, he said that he will seek to “address the issues in our hospitals. We need people back to work in our health care system.”

That afternoon, his Justice Minister issued an order attacking health care workers’ right to strike, invoking emergency COVID-19 orders. The order — condemned by over thirty labor, anti-poverty, and civil society organizations — threatened steep fines of up to $20,400 per day per worker, and fines for those “encouraging” strikes. The order also threatened to fine CUPE up to $100,000 for each day a worker did not comply.

Compliance with the directive, however, won workers little favor with Higgs’s government. According to CBC News, the government did not respond to the union’s counteroffer and continued to insist on the need to review education workers’ pensions.

On November 13, the union announced that workers would return to work across all ten locals — with a tentative memorandum of understanding on pensions. Few details have been released. But, already, Higgs introduced uncertainty into the deal, saying, “Going forward, it needs to be focused on innovation and changes in our workplace and in our work habits.”

Elevated levels of unemployment and a weak provincial tax base have plagued the Maritimes for decades. This has meant lower wages, higher rates of poverty, and deep cuts to social services across the region.

The federal Parliamentary Budget Office has recently noted that federal transfers will fall far short of what’s needed to maintain provincial expenses on health, education, and the like. Barring changes to transfers, “fiscal sustainability” will inevitably mean site closures, sell-offs, wage freezes, user fees, job and pension cuts, and regressive taxes in New Brunswick and across the country.

We should see bosses and the provincial government’s efforts to undermine the previously won rights of New Brunswick’s workers in this context. They are an attempt to increase the already large share of profits in the hands of the capitalist class by immiserating the working class. Employers across the country are surely taking note of what is happening in New Brunswick; workers must take note too.