Globe and Mail

Pay equity no threat to tax cuts, PM says

Budget can handle settlement, House told

Parliamentary Bureau
The Globe and Mail
Thursday, October 21, 1999

Ottawa -- Prime Minister Jean Chrétien promised yesterday that tax cuts would not fall victim to the $5-billion settlement expected to come out of a long-standing pay-equity dispute with 200,000 federal employees.

"We have a problem here that has to be dealt with. We will decide how we will do it, and when. But the commitment to cut taxes is a commitment that we intend to keep," Mr. Chrétien said in the House.

Mr. Chrétien was responding to attacks from Reform Leader Preston Manning, who said that successive Liberal governments have bungled the pay-equity issue ever since the adoption of the Human Rights Act in 1978. Mr. Manning said that ineptitude was threatening the tax windfall expected next year by Canadians.

"Instead of millions of Canadian workers getting a pay increase because of a tax cut, those workers can now kiss that pay increase goodbye because of the $5-billion bungle by the government," Mr. Manning said.

Mr. Manning blamed the Liberal government of Pierre Trudeau in the 1970s for "adopting the flawed concept of basing pay for civil servants on arbitrary assignments of value by bureaucrats and politicians."

But Mr. Chrétien said that his government had faced unexpected expenses in the past and always managed to come out with its books in order. The tab of the dispute, which could be up to $5-billion, is worth about half of next year's anticipated budgetary surplus.

"Sometimes we have to meet expenditures that were not forecast. But we always have managed to do that, balance the books, have new programs and have tax cuts, as we said we were to do," he said.

Last July, a Canadian Human Rights Commission tribunal awarded a multibillion-dollar settlement to 200,000 clerks, librarians, secretaries and other federal employees in female-dominated positions. The tribunal ruled that these employees were underpaid for up to 13 years in comparison with employees in male-dominated jobs, and deserved an average of about $25,000 each from Ottawa.

The federal government appealed to the Federal Court, but it lost on all counts two days ago. The ruling by Mr. Justice John Evans said that it was time to settle the issue.

Judge Evans also attacked the government for failing to comply with the Supreme Court's "broad and liberal" interpretation of human-rights statutes.

Treasury Board President Lucienne Robillard is expected to announce a federal reaction to the ruling by the end of this week.

In the meantime, the federal government is under attack from all sides: The Reform Party urged a further appeal of the decision yesterday, while the New Democratic Party asked for the immediate implementation of the ruling.

In one of his classic middle-of-the-road positions, Mr. Chrétien said that he wanted to pay some compensation to the affected civil servants, but not necessarily the amount that was dictated by the tribunal.

"We have recognized the principle [of pay equity]. The question is how much money has to be paid," he said.

Last year, the federal government offered the workers $1.3-billion to end the pay-equity dispute out of court.

The government has at least that much money set aside for a future settlement.

But the union representing the workers, invigorated by their victory before the Federal Court, has vowed to keep fighting to obtain the maximum amount of money possible, somewhere in the $4-billion to $5-billion range.

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