Anyone questioning the correlation between additional cash in their jeans and the number of options as to what to do with it should look at what happened recently in British Columbia, where the economy has been booming for several years.

The province’s robust growth has now reached the point at which two often bitter adversaries — a right-leaning provincial Liberal government and the still powerful public-sector unions — have found enough common ground to raise hopes for longer-term labour peace.

Like individuals with extra money in their pockets, the Gordon Campbell government has found itself with more options this spring as the majority of B.C.’s public-sector union contracts were due to expire on March 31. Boosted by unexpected new revenue from a provincial economy riding higher than ever on strong global commodity prices, Finance Minister Carole Taylor set aside $6 billion for public-sector contract settlements, which included $1 billion as a signing bonus for those unions able to reach agreement with Victoria by the end of March.

The unions not only grabbed this cash-laden carrot; they devoured it. All the unions whose contracts were due reached agreement with the government by the deadline. That gave the finance minister 51 negotiated settlements with unions representing 224,813 public-sector employees — including doctors, nurses, transit workers and hydro employees. The final contract was signed 29 minutes before midnight on March 31.

The average signing bonus per employee was $3,000. And even though many of these contracts are now being ratified by the memberships, the consensus is that the Campbell government’s strategy was a resounding success.

The substantial signing bonuses had significant appeal to public-sector workers whose nerve endings were still raw following several years of wage freezes and job cuts as Campbell took tough steps to bring B.C.’s budget back into balance following a decade of NDP rule.

The new wage increases were as high as 14% over four years and were in line with or exceeded increases in the private sector.

More signing bonuses

“This doesn’t say that we will, for the next four years, have labour peace in British Columbia. But it does say we’ve taken a big bite out of that problem,” Taylor told the Victoria Times-Colonist on April 1.

Taylor is justifiably cautious. Looming just over the horizon are negotiations with other very powerful unions, which represent some 66,000 teachers and school support staff. The contracts for these unions expire June 30. The government says if the unions settle before that date, they, too, will qualify for signing bonuses.

Regardless, having increased labour peace in B.C.’s public sector is seen as a positive sign for the province’s strong economy, which, Taylor admits, provided an extra $684 million for Victoria’s coffers following last fall’s jump in natural gas prices — the fallout from hurricane Katrina’s devastation late last summer.

And, according to a recent special report on B.C. by TD Bank Financial Group, the province’s economy is not only “firing on all cylinders,” the momentum should continue through the Vancouver-Whistler Olympic Winter Games in 2010.

Keeping the economic ball rolling well past 2010 will provide some challenges, however. In addition to national developments such as skilled labour shortages, aging baby boomers and a higher Canadian dollar, B.C.’s location next door to Alberta — Canada’s “unrivalled economic tiger” — is an additional competitive challenge. As TD says, Alberta’s lower tax and debt-free regime will continue to solidify its position as a magnet for investment and immigration.

However, the TD report also says that B.C.’s location next door to Alberta is “one of its greatest opportunities.” It recommends stronger trade ties between the two provinces, especially when it comes to Pacific Rim trade and opportunities arising from exporting oil from Alberta’s oilsands through B.C.’s tidewater ports, for example.

The consensus is that greatly improved public-sector labour relations will certainly enhance B.C.’s reputation as a reliable exporter. That, in turn, should add sustainability to B.C.’s booming economy. IE