Graham, Howard and the NDP’s health care deal-making

Seeing as how summer was stubbornly holding back again this year, I decided to postpone the light summer reading regime with something a bit more weighty – the recent explorations of Nova Scotia politics by former NDP MLAs Howard Epstein and Graham Steele. I found both books very engaging, although for different reasons. Rise Again: Nova Scotia’s NDP on the Rocks, Howard’s sometimes scathing analysis of his own party’s recent performance in government will provide plenty of background material for New Democrats as they prepare to reset (or not) their direction with the selection of a new leader in 2016. What I Learned about Politics, Graham’s jaundiced take on provincial politics in general could get people of all persuasions talking about how we can do politics better in this province (while also teaching pigs to fly).

The ironic thing is that while Howard’s book is a critique of the NDP under Darrell Dexter’s leadership and Graham’s unleashes a bit of a pox on all political houses, Graham’s book could well do greater damage to the NDP. That’s because of the way the media and the Liberal government latched onto his account of his decision to quit as Minister of Finance. Although Howard has a different interpretation of the events leading up to that decision, Graham’s explanation has become the conventional wisdom.

There was quite the build-up to that explanation. Between the time Graham quit in the spring of 2012 and his book came out last fall, ‘The Mystery of the Sudden Departure” rivaled “Who shot JR?” in some circles. When he departed Graham had said the usual things about leaving cabinet (and ultimately the legislature) for personal and family reasons, but most people thought there was more to it than that. Later, when word got out that he was writing a book about his life in politics, he made the smart marketing move of disclosing that the book would reveal more about why he resigned as finance minister (before coming back in a different portfolio a year later).

Why He Left

In the book, Graham cited many complex reasons for his departure, including being in a “general funk” about politics, but the “last straw” was the way in which contract negotiations with health care workers at the QEII unfolded in April, 2012. Those workers – represented by local 42 of the NSGEU – were poised to strike. As the deadline neared, Graham writes, “we prepared to introduce legislation to forestall the strike.” By Graham’s account, Darrell Dexter addressed caucus on the issue “and caucus was united behind him.” However, instead of proceeding with legislation, the government quickly made a new proposal, something Graham attributes to “the boys in the Premier’s office.” Two of the “boys” – principal secretary Matt Hebb and communications director Shawn Fuller – had previously worked for the NSGEU and one of them, Fuller, would return to work with the NSGEU when his stint at the Premier’s office ended following the 2013 general election.

The new proposal led to a 7.5% increase over three years for health care workers represented by Local 42. Combined with a similar deal reached around the same with health care worker represented by CUPE, 7.5% set the pattern for public sector workers in Nova Scotia, including teachers and civil servants.

Graham’s book implies but does not state explicitly that Fuller was the prime mover behind the fateful new proposal. He does write that the proposal – which he considered “generous” and “would stretch the public’s ability to pay” – was similar to one he had talked with Fuller about following the aforementioned caucus meeting. Elsewhere in his tale he acknowledges that during his time in cabinet, his involvement in collective bargaining had been limited to what came before the Treasury Board. The “heavy lifting” on that very busy front was left to Fuller, Hebb and Gordon McLean, a veteran negotiator working for the Public Service Commission. (Earlier in the book, Graham wrote about the key role in public sector negotiations played by the chair of treasury board, Deputy Premier Frank Corbett but he neglected to mention it in this key passage).

Media and Liberals pile on

To many observers the nefarious proposal from the boys may look like a win-win – strike averted without the necessity of back-to-work legislation. But from Graham’s various strands the media, specifically Herald columnist and erstwhile Conservative leadership candidate Bill Black, weaved together a tale about conflict of interest. In a Sept. 13, 2014 column entitled “Steele’s book illuminating, but NDP had other flaws,” Black flirted with slander. Pointing out the past and future connections between the NSGEU, Hebb and Fuller he wrote that the deal with Local 42 confirmed “latent suspicion that the NDP was particularly beholden to the unions.” He went on to ask readers to “imagine if the deal to hand Jim Irving $250 million had been made by a former (and future) employee of his working in the Premier’s office.”

Black was not alone in his interpretation of events, he simply spun things more toward the fantastic than others. The news coverage of the book also focused on the “last straw” union contract, paying little attention to other entries on the “long list of reasons” Graham gave for getting out of politics – professional and health concerns, the possibility of losing government, boredom with constituency work, the “revelation” of the futility of partisan politics and, ultimately, his absence from the Dexter government’s inner circle.

And the mainstream media have paid no attention at all to Howard’s version of events, an account that further lightens the load from the straw upon the proverbial camel’s back. In his book, published this spring, Howard writes that the NDP caucus agreed that “everything should be done to settle the negotiations, and most consented to legislation if all else failed. No one else seems to think that a caucus decision was overturned by staff.” (Italics mine – and it should be noted that Howard would not have supported back-to-work legislation). Howard’s take on what happened removes much of the impact of  the story as told by Graham – there goes the back room deal-making!

With the exception of Howard, New Democrats have generally kept silent about the events surrounding negotiations with Local 42. In the meantime, the McNeil government, keen to get the public behind its campaign against public sector unions has been quick to take advantage of Graham’s story. A few weeks after the book came out, the Liberal-crafted Speech from the Throne declared that “the central challenge facing our public finances right now is the cost of labour,” namely the increase of more than (sic) 7.5% over three years. Thanks to Graham’s revelations, trumpeted in the media, the Speech was able to add that “unlike the previous administration, this government will take a more deliberate and careful approach to labour relations in Nova Scotia. There will be no improvised and ad hoc decisions that will ultimately cost taxpayers hundreds of millions of dollars.”

The NDP’s supposed cave-in to the unions continued to be a favorite talking point during the spring session of the legislature, when McNeil and his ministers fended off questions about their cruel or dumb-assed cuts (whether to the film tax credit, or to organizations like CNIB or People First) with the refrain that these things would not be necessary “if we had wage increases that kept pace to the growth in our economy instead of exceeding it at the rate the former government did.”

Such ripostes invite at least two lines of inquiry. The first is a matter of fact. Did the wage increases agreed to by the NDP exceed the growth of the economy? The answer is no, it was the other way around. Since 2012 when the deals were signed, nominal growth in the economy came in at 2.4% in 2013 and 3.6% in 2014. If the government’s own budget projections for 2015 hold true, growth this year will be 2.7%. So in the period covered by the contracts 2012-2015 – nominal economic growth increases by 8.7%, compared with the much-maligned 7.5% settlement given the unions.

The more complex question is whether the Dexter government – and the boys in the Premier’s office – sold out to their supposed allies in the public sector unions? Should they have driven a harder bargain? Again, the facts as I know them do not support the political spin that has come in the wake of Graham’s version. Let’s take a closer look.

Collective bargain record

When the NDP came to power they inherited from the MacDonald Conservatives an expiring public sector wage regime providing annual increases of 2.9%. With barely a peep from the unions, the new government negotiated a series of agreements limiting wage increases to one per cent a year for two years. By Graham’s own account, much of the “heavy lifting” involved in getting these bargain-basement agreements was done by the NSGEU-tainted duo of Fuller and Hebb. Those 1% increases in 2010 and 2011 were well below cost of living increases of 2.2% in 2010 and 3.8% in 2011. Beholden to the unions, indeed.

Recent rhetoric from McNeil and other public sector bashers suggests that the one per cent benchmark should have been the NDP government’s final offer for post-2012 contracts. However, if there ever was such a 1% solution, it hit a snag in the fall of 2011 when nurses working at the QEII rejected the one per cent offer at the bargaining table. They went to arbitration armed with an argument about needing to regain their status as the highest paid nurses in the region (Newfoundland nurses had recently jumped ahead of them). The nurses made their case and received an increase of 5.1% over two years 2011 and 2012, on top of the 1% everyone else received.

The public record is sparse, and Steele’s book is silent, on exactly what happened next. In February 2012, with negotiations set to begin on a new contract, the District Health Authorities announced they would bring forward a common set of proposals. The only mention of wages was that the employer could not afford the 5.1% increase awarded QEII nurses. A little over a month later, on March 19, Local 42, which included licensed practical nurses, occupational therapists, lab technologists and other health professionals working at the QE11 voted to strike. The mediator’s report preceding the strike vote showed the gap between the parties – the employer was offering 2%, 2% and 2.5%, to take effect on November 1 of 2011, 2012 and 2013. The union wanted 2.9%, 2.9% and 3.25% over the period. At some point thereafter Treasury Board (of which Graham was a member) okayed an offer of 6.9% over three years – 2%, 2% and 2.9%. According to Graham, he wanted to ensure this offer was “on an all-in basis” without “several sweeteners” that had come up during discussions among members of the negotiating team.

Had the dispute gone to final offer arbitration, the route Graham seems to have preferred, the employer’s offer could not have been less than 6.9%. The final agreement was for 7.5% – down from the 9.05% the union wanted going in. Without knowing whether there were any additional “sweeteners” involved in the final agreement, the closest you can come to calculating the difference between what Graham had agreed to and what was finally settled upon was 0.6% over three years. Not quite Rage Over a Lost Penny, but worth quitting over? Maybe it was the members of Local 42 – 1.55% below ask – who should have been angry.

Moreover, according to head “boy,” the Premier’s chief of staff, the settlement ended up costing less than legislation would have. In a note to journalists shortly after the release of Graham’s book, Dan O’Connor reported that government had “good information and independent advice” that the proposed legislation and final offer arbitration would have cost 0.5% more than the settlement.

We will never know whether that more costly settlement would have been the outcome, but what can we make of the NDP’s record in four-plus years of public sector wage negotiations? Does it support the notion that their government sold out to the unions? Not if you compare public sector wage increases with the general pattern of wage increases. In 2010 and 2011, when public sector workers were getting 1% wage increases, wages and salaries in general were going up 2.7% and 3.0%. Over the next three years, the 7.5% raise for government workers was higher than the 6.1% over increase, but over the full five years the 9.5% for public sector workers was below the 11.8% overall increase in salary and wages.

And what should we make of Graham Steele, author? As a fellow author (whose sales are likely nowhere near as good as Graham’s) with experience in both the back rooms and front lines of politics, I believe that politics and book writing suffer from the same thing. You may embark on both activities with the highest and purest motives but in the end your success is judged on how many people will buy what you are selling. A well-written book describing the mid-life crisis of a fish-out-of water (Graham, a Rhodes scholar moved here from Manitoba in 1986) provincial politician may have found a publisher and appreciative, if modest readership. But in books, like politics, selling requires a certain amount of sizzle and a receptive audience. Graham’s version of the health care story sizzles with its description of back room dealings and resonates with a sizeable group eager to bash public sector unions and politicians who support their right to free collective bargaining.

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About Richard Starr

RICHARD STARR has had careers as a journalist, public servant, broadcaster, political staffer and freelance policy adviser. He is author of numerous newspaper and magazine articles, appearing in everything from Atlantic Insight to Atlantic Progress. A lifelong student of Maritime history, Starr is married to playwright and former MP Wendy Lill. They live in Dartmouth.
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One Response to Graham, Howard and the NDP’s health care deal-making

  1. Shawn says:

    This is almost exactly right. I was going to tell this story one day, but I don’t think I need to now.

    Liked by 1 person

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