CANADA/COVER

DAYS OF CRISIS

BOB LEVIN April 14 1986
CANADA/COVER

DAYS OF CRISIS

BOB LEVIN April 14 1986

DAYS OF CRISIS

CANADA/COVER

They swarmed into the Confederation Building, an 11-storey, yellow-brick tower that dominates the Newfoundland capital of St. John’s from a hill on the city’s northern outskirts. Crowding the lobby and overflowing on to mezzanine balconies, the strikers—2,000 of the 5,500 members of the Newfoundland Association of Public Employees (NAPE) who walked off their jobs in early March —listened as union president Fraser March conjured up the spectre of unbridled social unrest if the strike continued.

“There is discontent in this province,” warned March. “If we don’t handle it soon, it could be out of all our control.” And March had a pointed political message for Premier Brian Peckford: “If the government challenges the union’s right to exist, we’ll see who exists at the end of the battle.”

Eventually, the strikers left the building peacefully, but not before chanting several choruses of “Na na na,

Peckford goodbye.”

Squall: At the end of the fifth week, Newfoundland’s public-service strike had grown into a political squall that battered Peckford’s once-secure ship of state and contributed to the rising clout of union leader March (page 20). For a few days last week there were tentative hopes that the storm might be subsiding. The most promising sign came Wednesday when Peckford, giving his first interview since the strike began, suggested on television that the province was willing to compromise on the key issue of granting the strikers wage parity with other civil servants who earn higher salaries. Union officials were encouraged and the two sides met several times behind the closed doors of the labor department boardroom. There was even speculation that the union might agree to halt picketing for

48 hours to resume bargaining. But Labor Minister Ted Blanchard warned, “There’s no reason to be overly optimistic.”

He was right. On Saturday the exploratory talks collapsed in acrimony—with no prospect of an early return to work, or even a resumption of bargaining. Said an angry March: “The government is not prepared to agree that parity will be reached during the

term of this agreement.” Peckford, at a highly charged press conference, declared that his side had offered “parity plus.” He added that the government had “given away the shop and NAPE still refuses to agree.” Amid the charges and countercharges, the only certainty seemed to be that both sides remained far apart.

For the 43-year-old Peckford, any conciliatory gesture might have been regarded as a break with form. For seven years the Tory leader has governed “the Rock” with a confrontational, Newfoundland-first brand of populism, most notably standing up to Ottawa

and multinational corporations to win greater control of the province’s offshore oil (page 21). This time, however, he has picked a fight not with outsiders but with Newfoundlanders themselves. And the strikers have gained widespread popular support—particu-

larly after police arrested 123 unresisting picketers during one four-day period last month. Said William Rowe, a St. John’s radio talk-show host who failed in his bid for a Tory nomination in the last election: “There is overwhelming public support for the strikers and very little sympathy for the government.”

Until his eleventh-hour TV appearance, Peckford had seemed increasingly isolated, holed up in his eighth-floor

office in the Confederation Building while picketers shivered below and many government services ground to a near-standstill. Some observers were already predicting that the Conservatives would lose the next election, which is expected in 1988 or 1989—or even that Peckford would resign earlier. Said one longtime worker for the Tories: “They’re as good as gone.” Still, Peckford is hardly down for the count yet. He remains a formidable fighter, and his political opponents, particularly the Liberals, have failed to take full advantage of his strikerelated woes—an opportunity that could quickly vanish.

Even if the strike is settled soon, it

has tapped into a deep pool of public disenchantment. Thirty-seven years after joining Confederation, Newfoundland, with a population of 524,000, remains a have-not province bearing no resemblance to the prosperous “new Newfoundland” which Peckford promised when he succeeded fellow Tory Frank Moores in 1979. Dreams of an offshore-oil-inspired

boom have faded with falling world oil prices. Despite some isolated bright spots, other resource industries, especially the vital fishery, are struggling. The province already lays dubious claim to the highest cost of living in the nation. Unemployment stands at nearly 21 per cent, and federal transfers of cash and other government spending comprise a stunning 80 per cent of the provincial economy. And neither Peckford nor any other politician has an easy solution. Said William Rompkey, a Liberal MP for Grand Falls-White Bay-Labrador: “I don’t think there is any simple pot at the end of the rainbow.”

It was against that bleak eco-

nomic backdrop that workers from the 14,000-member union decided to strike. One issue was the disparity of as much as $3,000 between civil servants doing similar jobs in different government branches and bargaining units. The problem arose because some units won sizable pay increases before a succession of cost-cutting wage controls— and then a two-year freeze in 1984—

left other units out in the cold. The second issue dates back to 1983, when the Tory-dominated legislature passed Bill 59, an amendment to the Public Service Collective Bargaining Act. The bill requires the union and the government to negotiate which categories of unionized workers—such as ambulance dispatchers and snowplow operators— will be designated essential employees, who would not be allowed to strike. Because as many as 49 per cent of the union’s workers can be declared essential, union officials insist that such an action blunts their strike weapon.

For 21 months union and government negotiators struggled—but failed—to reach agreement. Finally, on March 3 about 1,200 highway maintenance employees and public works crew members walked out. The strike was illegal because NAPE refused to designate any of the workers as essential. The next day the provincial Supreme Court issued a backto-work injunction. But the workers stayed out and, since then, they have been joined by 800 other blue-collar workers and 3,500 clerical and technical workers. When Peckford ordered the police to make arrests, the picketers quietly queued up to be herded into vans; union president March even shook the hand of his arresting officer for the benefit of TV cameras. The show of force shocked Newfoundlanders, enough to offset early skepticism about an illegal strike. Now, said Liberal Leader Leo Barry, public sentiment “is not prounion, it’s anti-arrogant government.”

Chorus: Whatever its exact nature, public support was evident last week in a steady chorus of horns from cars passing the picket lines at the Confederation Building. About 10 to 20 strikers _ took their turns at each of I the three entrances bundled against a cutting west wind. Their strike pay is only $100 a week, plus $10 a week for each dependant, but they seemed determined to stay off the job until they get their way. “We’re not making enough money,” said Joanna Skinner, a $13,000-ayear office assistant. “Someone doing the same job in hospital services would be making $3,000 more.” Not all the pickets earned such low wages. One man, a cost research analyst with the fisheries department, makes $32,000 a year, but would be earning $37,000 in a

similar position with hospital services. And he was angry about the bill governing essential workers. “Bill 59,” he said, “has to be, if not abolished, certainly amended.”

Discontent was hardly limited to the picket line. Inside the Confederation Building, a nonunion secretary who has worked there for 15 years but still earns less than $16,000 annually said that, because of her position, “I’ve got to say it’s an illegal strike and they shouldn’t be out there. But I’m lying through my teeth.” The building’s institutional green and light-yellow corridors were more barren than usual. Many managers were pitching in to keep essential services operating: an administrator in the finance department now spends his mornings sorting letters in the ground-floor mail room.

Elsewhere, payments to doctors were delayed and a short-staffed social services department struggled mightily to run the notoriously complex welfare bureaucracy.

Olive: For most of the strike, government officials have tried to keep the union on the defensive.

Neil Windsor, president of the Newfoundland Treasury Board, repeatedly insisted that the government could not negotiate with participants in an illegal strike. At the same time, the government placed advertisements in local newspapers and on radio stations describing its latest settlement offer as “fair and reasonable.” In return for an end to the strike, the province offered to amend some offending clauses in Bill 59 and to accept wage parity among civil servants as a valid objective—though it did not mention a specific deadline. The government also said it would improve upon its latest wage proposal: a minimum of a six-per-cent increase in each of the three years of a contract.

Then, last week, Peckford seemed to extend an olive branch. According to his press secretary, Frank Petten, senior finance and Treasury Board officials had met during the Easter weekend and determined that it would be possible to achieve wage parity within Peckford’s remaining four years in office. And that is what the premier appeared to suggest two days later on the provincial CBC current affairs program

On Camera—without actually making a firm commitment. Said Peckford: “We want to get to parity as fast as is humanly possible in the shortest time possible. I know what shortest time means. I know how many years I’ve got left in my term.” The premier added, “If the workers remove the picket lines and go back to work within

24 to 36 hours, 48 at the outside, we’ll have an agreement they are going to be happy with.”

When the show aired, March was attending a union rally at a steelworkers’ hall in Labrador City. But later he and Peter Fenwick, leader of the provincial New Democratic Party, watched a tape of the interview on a videocassette recorder at the home of one of Fenwick’s supporters, replaying it three times to make sure they heard it right. Even with Peckford’s obvious hedging, March took hope. The following day he and two union negotiators began their closed-door meetings with Labor Minister Blanchard. The labor

leaders were presumably trying to turn Peckford’s implication into a firm deadline for parity, but March cautioned, “One danger is that the premier was not sincere, that he was just trying to win back public support.” Indeed, as the talks collapsed Saturday, March accused Peckford of engaging in “shallow public relations.”

Such a four-year deadline would contradict the government’s earlier claim that financially strapped Newfoundland—which already has Canada’s highest sales tax (12 per cent) and personal and corporate income taxes— could not afford parity without slashing programs or firing employees. But many Newfoundlanders have grown cynical about such cries of poverty. Since last August the province has spent at least $450,000 to redecorate Peckford’s suite of offices. And in February the government announced new car allowances of up to $5,000 for deputy and assistant deputy ministers, some of whom do not own cars. The

move was postponed as an economy measure in last month’s budget, but it continues to rankle.

Those actions had been public-relations disasters for Peckford even before the civil service walkout. And as support for the strikers continued to spread—last week the Newfoundland Teachers Association voted to contrib-

ute $600,000 to NAPE’S strike fund—it became increasingly clear that Peckford and his party had a serious political problem. One prominent St. John’s businessman and Tory fund-raiser said flatly, “I don’t think the Conservatives will win the next election.” Of course,

a lot could change in the four years before then. But only one year ago, when Peckford won the latest of his three electoral victories, the opposition Liberals gained 10 seats in the 52-seat House of Assembly, giving them 15 seats compared to 36 for the Tories and one for the New Democratic Party.

The results were a sign of dissatis-

faction with Peckford’s labor and economic policies—and perhaps with his pugnacious style of politics as well. Since then, business and labor leaders complain that their access to Peckford has become increasingly limited. “He got too cocky,” said former Liberal

leader Stephen Neary. “He insulated himself from the people and wouldn’t listen to anybody, and that’s what got him into the hole he’s in.” Even some members of his own party think Peckford must change his ways. “If he wants to form the next government,” said former Tory cabinet minister Joseph Goudie, “he has to have a better relationship with labor. It’s as simple as that.”

Some observers, Tories and Liberals alike, are even speculating that Peckford will step down early to avoid an election loss. That is a similar scenario to the one in which Peckford replaced the badly discredited Moores seven years ago. “Ask me what’s going on in Peckford’s head right now,” former Liberal leader Neary said of Peckford, “and I’d say he’s wondering what he’s going to do after he retires from politics.”

Shrewd: But other Newfoundlanders maintain that such talk is wildly premature. Peckford remains shrewd—and resourceful. Moreover, Peckford still has ample time before the next election to engineer a highly visible—and politically popular—accomplishment. He could, for instance, strike a deal with Ottawa and the oil companies to divide up any eventual tax spoils from offshore oil, or he could break the impasse with Quebec over the bargain-basement rates that Newfoundland gave Quebec in 1969 for hydro power from Labrador’s Churchill Falls.

Also in Peckford’s favor is the apparent weakness of his opposition. Liberal leader Barry is a former Tory who resigned in 1984 as Peckford’s energy minister, then crossed the floor to the Liberals and won the leadership less than a year later. A Yale-educated lawyer, Barry is a lacklustre politician with a “towny” intellectual image that does not play well among rural voters. Still, he is regarded as intelligent and sincere, and he has begun staking out positions distinct from Peckford’s, notably in encouraging outside investment and reducing the sales tax.

Slip: On the other hand, should Peckford tough out the strike and lead the Tories into the next election, the outcome could well hinge on the NDP. Leader Fenwick was arrested along with the NAPE strikers and, said one union man, “He’s a hero on the picket line.” Fenwick’s party seems to have no chance of winning more than a small handful of seats. But it could take enough votes away from Barry to allow Peckford’s Tories to slip back into power.

No matter who governs Newfoundland, however, he will face the deepseated problems of an impoverished province. Although the construction of Allied defence bases brought unprece-

dented prosperity during the Second World War, the Newfoundland that Joey Smallwood led into Confederation in 1949 had a standard of living far below that of the other Atlantic provinces. Now, it is arguably more dependent than ever on federal transfer payments. Unemployment hovers over 20 per cent—but is undoubtedly much higher, because the rate does not reflect many seasonal workers who do not actively seek employment the rest of the year.

Newfoundland’s

14.000 fishermen have been particularly hard hit, caught between rising costs and declining returns (page 19). Vital inshore cod catches have fallen consistently since 1982. Some scientists blame unusually cold water temperatures for keeping the cod beyond the range of the fishermen’s nets, while some fishermen say the groundfish are simply being caught far offshore—the result, they say, of indiscriminate fishing outside Canada’s 200-mile zone, particularly by Spanish and Portuguese trawlers.

Help: The government has stepped in to help many hard-pressed fishermen. Last fall some

3.000 of them were allowed to delay payments to the provincial fisheries loan board for one year, while the federal and provincial governments spent $9.5 million on makework projects to give 3,900 fishermen and plant workers the 10 weeks’ earnings they needed to qualify for unemployment insurance. The two governments are also directly involved in running the fishery. Along with the Bank of Nova Scotia, they own Fishery Products International Ltd., Newfoundland’s troubled fishing giant. But this year the company has netted some good news: it found buyers for seven of its money-losing plants.

The mining industry, another mainstay of Newfoundland’s economy, also generates mixed results. This week a zinc mine at Daniel’s Harbour in the northeast part of the island will close indefinitely because of low market prices. In February the province decided to give a $12-million equity injection to the chronically troubled asbestos mine at Baie Verte on the north coast. And at St. Lawrence on the west coast, the federal government is providing $4.8 million and the provincial

government $2.1 million to allow Minworth Ltd. of Britain to reopen a flourspar mine, which was closed in 1977. But the brightest spot has been iron ore production, the value of which increased 30 per cent last year—accounting for 87 per cent of the province’s mineral production. And by July, BP Canada’s Selco Division will decide whether to develop its Chetwynd gold discovery in the southwest.

But Newfoundland’s great black hope remains offshore oil. Last year Peckford signed an agreement with Ottawa called the Atlantic Accord, giving the province a voice in the management of Hibernia oil and the right to tax revenues from one of the world’s largest potential pools as if it were on land. The federal and provincial governments are now considering Mobil Oil’s development plan for the 500-millionbarrel field. As well, they are still negotiating the complex taxation and royalty agreements with Mobil and its partners.

But the gnawing fear in Newfoundland is that low world oil prices, now at $10 a barrel, will delay development, which was expected to produce large quantities of crude by the early 1990s. Indeed, last week Mobil announced that

it will not proceed with two major contracts for the $5-billion project until talks with the two governments are further advanced. Oil and gas exploration off Newfoundland has already declined to four operating rigs from eight last year. Said Peckford: “You can’t win for losing. It’s true for Newfoundland. Just as we’re ready to start on prosperity, away goes the price of oil.”

That has long been Newfoundland’s sustaining vision: the promise of prosperity just around the corner. It was Smallwood’s vision, and now it is Peckford’s, and for both it proved to be a potent political message. “For Joey it worked for 23 years,” said Liberal MP Brian Tobin. “For Peckford, obviously not quite so long.” But that most definitely remains to be seen. When the strike is finally over, Peckford will likely have four years to turn that vision of prosperity into at least some semblance of reality. If he fails, Newfoundland’s tempestuous politics could well send him crashing to shore.

BOB LEVIN

CHRIS WOOD

PAT ROCHE

PETER GARD

LARRY JACKSON

St. John’s

PAUL GESSELL

MARC CLARK

KEN MACQUEEN

in Ottawa