Back in 1993, and faced with a potential deficit of $17 billion, Premier Bob Rae’s NDP government was at a crucial crossroads:
-run the deficit that high and completely lose face as prudent stewards of the public purse
-or try to lower the deficit through unpopular, but ultimately necessary measures.
The Rae Government opted for what it called “a three-legged stool” approach. It would raise taxes by $2 billion, cut program spending by $2 billion, and try to negotiate $2 billion in wage reductions from the hundreds of thousands of Ontarians who were paid from the public purse.
The idea was to have public servants take 10 days off work, unpaid. The alternative was firing tens of thousands of people in the middle of the worst recession since the Great Depression.
Ultimately, the government couldn’t negotiate the wage reductions, so it imposed them. Those unpaid days off work became known as “Rae Days.”
Last week, in the lobby of the House of Commons after he had just voted, I asked now Liberal MP Bob Rae “Three Questions” about this time in Ontario history.
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Steve Paikin:What were the main lessons you learned from your efforts to bring in Rae Days back in the 1990s?
Bob Rae: It’s very difficult. You’re asking people to give up something when they’re not persuaded it’s necessary. It’s an act of unbelievable persuasion. The reality is, 60% of public expenditures in Ontario is money spent on salaries. If it doesn’t come off salaries, it comes of the number of people who are going to be unemployed.
If you ask employees themselves, if they’re confronted with that reality, people are prepared to do it. There weren’t massive demonstrations or work stoppages after we did it. As time has gone on --- opinion is always divided --- but there was general acceptance.
In the private sector, when we’ve hit the (economic) wall, there’s a padlock at the gate. There are a series of objective tests to show you’re in trouble. In the public sector, it’s never a wall. It’s a window or a door.
SP: Can union leaders ever be persuaded to accept less?
BR: The question is whether people are more concerned about job security or just accepting a little less. The people who would have suffered the most (through layoffs) were younger teachers and nurses. And we protected those who made less than $30,000/year. But people are rarely persuaded that they’ll get laid off.
SP: Dalton McGuinty has taken “Dalton Days” off the table for now. But if he were to reconsider the idea, what would you advise him to do?
BR: Don’t go down the path unless you’re serious about doing it. We had a discussion (with the union leaders) that went on from February to June (1993). We had long discussions. People can’t say we didn’t consult. And the unions feel their hand is stronger now because of the Supreme Court decision.
(In 2007 the Supreme Court of Canada ruled that a British Columbia proposal similar to “Rae Days” was unconstitutional). But you can do it if people agree to do it. And if you can avoid the confrontation, you should.
But the debt is substantially more now than when I was premier. I’d like that to be known!
(Note: Bob Rae will appear on The Agenda tonight at 8 and 11 pm)