The union representing Canada Revenue Agency workers is proposing a series of pay bumps worth more than 30 per cent of current wages to keep up with inflation — a move described by observers as both "unprecedented" and "crazy."
The Union of Taxation Employees (UTE) is proposing the following wage increases. They would be on top of a one-time nine per cent wage adjustment:
4.5 per cent effective Nov. 1, 2021.
8 per cent effective Nov. 1, 2022.
8 per cent effective Nov. 1, 2023.
When compounded over three years, the four proposed hikes would result in a "historic" wage increase for the largest workforce within the federal public service, at nearly 55,000 employees in 2022, said union president Marc Brière.
About 35,000 of those employees are represented by UTE.
Brière said the proposal aims to address an imbalance between CRA employees represented by UTE and the Canada Border Services Agency (CBSA), which has approximately 14,000 employees.
I've never heard of demands anywhere close to this. - Jock Climie, Labour lawyer
The two agencies used to function as one between 1999 and 2003 where employees were paid the same rate. Once they became independent of each other, it created a wage gap of nine per cent because CBSA uses the Excise Act.
"They used to sit side-by-side in the early 2000s. They were the same group and occupation, the same classification, and then making the same amount of money," Brière said.
As of 2021, wages at the CRA have ranged between $41,658 and $121,923, compared to the CBSA which range from $64,849 and $135,509.
This graph shows how wages compare for similar administrative positions within the two agencies.
Similar roles, different pay
The proposal comes at a time when Canada's Taxpayers' Ombudsperson is dealing with a historic amount of public complaints about the CRA over delays in people receiving benefits, tax returns and access to CRA accounts.
However, it appears CRA employees' wages may also lag behind other federal agencies deemed outside the government's core public administration.
Direct comparisons are difficult to pinpoint due to differences in roles and salary designations. This chart does show what a mid-level CRA employee makes after three years, compared to administrative counterparts in the next three largest federal agencies.
Yearly earnings after 3 years
The discrepancy doesn't add up with the work CRA employees have been asked to do, said Brière, especially in recent years because of the pandemic.
"We have people that are specialized. The Income Tax Act is complex and they are doing great work. They have proven it during the pandemic, not only administering the income tax programs but even the emergency programs, which is not in our portfolio," he said.
It's a big ask at the centre of tense negotiations between the union and CRA management, which have both failed to reach a collective agreement.
UTE announced nationwide strike votes earlier this month that will take place from Jan. 31 to Apr. 7.
The CRA has filed a complaint against the Public Service Alliance of Canada—Union of Taxation Employees with the Federal Public Sector Labour Relations and Employment Board, arguing the union has failed to "bargain in good faith" and "make every reasonable effort to enter into a collective agreement."
Living costs justify proposal, says union
Until now the biggest wage increase for CRA employees was 3.2 per cent per year from 2000 to 2003, which amounted to a nearly 10-per-cent bump over three years. Its lowest was one per cent per year in 2014 and 2015.
Brière argues this time is different because of inflation and the high cost of living.
"People are having a hard time out there to make ends meet and so that's why we're asking for a new contract with decent wage increases," he said.
It's an "unprecedented" request, according to Jock Climie, an Ottawa-based labour lawyer who has negotiated bargaining agreements for unions and federal agencies for more than 20 years.
"I've never heard of demands anywhere close to this," Climie said.
This could be a sign of things to come with increasing inflationary pressures causing unions and employees to become "more aggressive in terms of their demands," he added.
Critics say proposal is 'crazy'
On the other side of the negotiating table, CRA management says the wage proposal would be costly to taxpayers and the threat of a strike during tax season puts unfair pressure on Canadians.
Some other critics agree.
"Everyone struggled through the pandemic but these government employees did not struggle ... in the same way that their neighbours, who will have to pay higher taxes to fund these union negotiators' demands," said Franco Terrazzano, the federal director of the Canadian Taxpayers Federation, which lobbies for lower taxes.
He said the union is using inflation as "an excuse to gouge Canadian taxpayers that can't afford these crazy demands."
The union and the CRA are scheduled to attend Public Interest Commission hearings on Jan. 27 and Feb. 20 with the Federal Public Sector Labour Relations and Employment Board.
The board is expected to put forward recommendations on how the two parties can reach an agreement this spring, but the recommendations are non-binding.