The declining world economy has caused a difficult year for many people in New Brunswick, and this past week the impacts hit all members of the Public Service, including our members at NB Power.
As reported in the media and on the Local 37 website, last week the New Brunswick Government announced that they were going to run an $800 million deficit budget. Part of this deficit is caused by declining revenues -- for example, last year the New Brunswick Government collected over $110 million in royalties and taxes from the mining sector, but with the downturn in the economy, revenues from that sector are expected to be less than $10 million. The loss of revenue from this and other sectors is a big part of the problem.
One part of the deficit is related to almost $300 million in investment losses in our Public Service Superannuation (PSSA) pension fund. I want you to know that this is a "paper" loss that has to be accounted for, but there is a likelihood that as the markets recover the fund will gain back much that it has lost. I also want you to know that Premier Graham told us that he is committed to maintaining our pension plan.
Government is proposing a four year plan to return to a balanced position, but as part of that, they announced job cuts, a hiring freeze for part of the civil service and a wage restraint policy which will impose a two-year wage freeze on all public employees, including Crown Corporations such as NB Power. The Government has said they will not break current agreements, but as agreements expire and are renegotiated, the two year freeze will be phased in.
The hiring freeze and job cuts should not affect NB Power. The wage freeze will affect Local 37 members at NB Power as our current agreements expire and come up for renegotiation. The first agreement that will be affected will be the Nuclear Contract which expires in 2010, then Generation in 2011 and Distribution and Transmission at the end of 2012. That means there is some time before the impacts will be felt by members.
The reality is that there may be a lot of changes between now and then -- the economy can improve, or it could get worse. The key thing I want all of you to know is that we will stay on top of developments in this situation.
No one, least of all me, is happy to be in this position. The simple fact is we are part of a global economy and although Canada is better off than some countries, we can't escape all of the fallout. A lot of people are facing some pretty tough times, with job losses and other serious impacts. We could be in worse shape.
As we go forward and renegotiate our next contracts, we will deal with whatever situation exists at that time. I am sure that there are meaningful improvements we can make, even in the context of a wage restraint policy.
I also strongly believe that even more than before, the key to secure jobs and future gains are to be had by embracing the values of the IBEW Code of Excellence -- having the most productive workers, the best trained workers, and producing the highest quality of work.
If we embrace these values, we invest in our future, and that is what will help us weather the storms we face.
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