Tories sharpen their wedge issues, eye cuts to public-service pensions

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While everyone was parsing Stephen Harper's speech and trying to eavesdrop on delegate gossip at the weekend's Conservative policy convention, the real news centred on a pair of resolutions that could serve as an overture to a major confrontation between the government and public-service unions in 2014.

Apart from being consonant with conservative values – and don't underestimate that – confronting public servants by clawing back their benefits would serve as a powerful wedge issue leading up to an election.

It would tap the resentments of private-sector workers, many of whom took a serious hit during the recession, even while their public-sector counterparts were protected. It would paint Thomas Mulcair's NDP as being in thrall to Big Labour, and it would leave Justin Trudeau's Liberals sitting – and in danger of being impaled on – the fence.

One resolution demanded that public-service pensions be converted from defined-benefit to the much more modest defined-contribution plans, to "bring public-sector pensions in line with Canadian norms."

Another required the government to ensure that public-sector benefits and pensions were "comparable to those available to similar employees in the private sector," and to be "made comparable" if they are not.

This prompted an intervention from Treasury Board President Tony Clement. Such interventions at conventions are highly unusual – these gatherings are for members, not ministers, which is why the resolutions are non-binding.

But Mr. Clement wanted everyone in the hall, and everyone outside it, to know how enthusiastically he supported the motion.

"This is exactly our position going into the next round of bargaining," he told delegates. "For too long, there has been this major gap in wages and benefits between the public and the private sector … this is not sustainable, it's not right, it's not conservative and it's not in the public interest."

Both motions passed handily – hardly surprising. Treasury Board gets into the meat of contract talks with its public-service unions next year, with most contracts expiring in 2015.

The minister could, of course, be bluffing, sending a very public shot across the bow of the union leadership while privately planning to cut a deal rather than risk a public-servants' strike in an election year.

But the facts suggest otherwise. Back in May, Mr. Clement made a point of declaring that any new contract would have to make it easier for management to identify and, if necessary, dismiss underperforming workers.

That followed on new powers that the government gave itself to oversee contract negotiations between unions and Crown corporations such as the CBC, Canada Post and Via Rail.

At that time, Mr. Clement declared a position identical to that passed at the convention.

"Most of Canada works in the private sector," he said then. "They're used to seeing wages of a certain sort, benefits of a certain sort, pensions of a certain sort, and I do believe we have to be within spitting distance of that when it comes to the broader public sector as well."

Last month, the government introduced legislation that would limit the union leadership's ability to take a dispute to arbitration, which could leave the union with no choice but to force a strike while giving the government discretion to decide which workers are essential. This could gut the effectiveness of the strike.

The furor of the Senate expenses scandal obscured that move. That's the thing about scandals – they transfix the public's attention, while other events go unnoticed, some of which the government is quite happy to see go unnoticed.

A strategy of union confrontation carries big risks, including the biggest, of a strike. Mr. Harper might avoid courting such a notoriously unpredictable situation – unless the fallout from the Senate scandal becomes so toxic that he feels it's worth the risk.

Either way, the contract talks with the leadership of the unionized bureaucracy will bear very careful watching over the coming year. The future of this government could hinge on their outcome every bit as much as Tory travails in the Senate.

John Ibbitson is the chief political writer in The Globe's Ottawa bureau.