Taylor woos the unions with a tempting cash offer

VICTORIA - Finance Minister Carole Taylor has made a useful stab at improving public sector bargaining, offering some $1.3 billion worth of carrots.
She didn't need to bring out any stick; the government's willingness to whack unions around is already well-established.
Taylor needed to find a new approach. The government is heading into negotiations with unions and associations representing some 300,000 workers over the next six months, about 90 per cent of the public sector. It has lots of extra money that unions are eying, and learned from the teachers' strike that the public is tired of imposed settlements.
So Taylor tried to rejig the process.
No more standard wage mandates - a freeze, or two, two and two.
Now the government will set different mandates for groups based on market conditions. Skilled labour, much in demand, can expect bigger increases. Groups already paid ahead of their private sector counterparts, or other provinces, can expect less.
And she's hoping unions and employers will tailor individual agreements to their circumstances. Some people may want time off, or more support, more than they want money.
There's still an overall ceiling on wage and benefit cost increases. The government figures surpluses between now and 2010 will be about $14 billion. (Likely a low estimate.)
It wants to spend $2.6 billion on debt repayment, and split the rest between contract settlements and other expenses.
That leaves about $5.7 billion, or enough to increase total wage and benefit spending by 2.7 per cent a year over each of the next four years.
Not a bad starting point. Unions are going to be looking for increases that match inflation - figure two per cent a year - and provide some catch-up for the ground they lost to wage freezes and rollbacks in the last contract. The money on the table gets them close.
But Taylor went farther. Soaring natural gas prices have pushed the expected surplus for this year to almost $3 billion.
The government has offered unions and associations like the BC Medical Association have a shot at $1 billion of that money - if they can negotiate quickly enough to sign a new contract by the time the fiscal year ends March 31.
The money would have to be used for a one-time payment, but that leaves a lot of room. The cash - about $3,300 per person - could be paid out as signing bonus, or used to bail out benefit plans running into difficulty.
Practically, there are some big hurdles. Most of the unions are still preparing their bargaining positions. Getting a deal in the limited time remaining - especially given the history of mistrust - will be a huge challenge.
But the money is a strong incentive for the unions, while employers who drag their feet will face even tougher talks once the $1 billion is off the table.
The province has also tried to encourage four-year deals, taking the contracts past the Olympics and the next election. As long as there is at least a $450-million surplus in 2010, the unions that sign longer deals will share in $300 million. That means at least an extra 1.6 per cent that year, on top of the negotiated increase.
A lot can go wrong.
Unions traditionally have huge difficulty with settlements that offer different members different rewards. The government would like an electrician - much in demand - to get a bigger raise than the janitor who works the same shift. That's a tough sell.
And the different wage mandates for different sectors - although entirely appropriate - are going to spark fierce debate in the union movement.
Negotiators for the employers, who have become used to just saying no, will also have to show creativity and flexibility.
I have no idea if it's going to work.
But this a well-crafted starting point, with the potential to help both sides develop a much more mature, productive bargaining relationship.
Footnote: The new approach faces a tough test in the form of talks between the government and the BC Medical Association. Doctors have to decide early in the New Year whether to go to arbitration or continue talks. Their approach may send a message about whether the government's approach will fly.