Thank you, Mr. Speaker. My questions today are addressed to the Minister of the Department of Human Resources. I’d like to ask him some questions with regard to northern allowance that’s paid to our employees.
As a matter of course, the northern allowance is determined under the Collective Agreement between the government and the Union of Northern Workers, but the northern allowance is based on a base rate at Yellowknife rates and I do have some concerns with that. I don’t know that Yellowknife necessarily is the cheapest location in the territory. It is in some areas, not in others. I realize that this is a difficult problem because it is in a Collective Agreement, but I’d like to ask the Minister initially if he could explain the methodology that is used to determine the northern allowance and what’s the rationale for using Yellowknife prices as a base. Thank you.
Minister of Human Resources, Mr. Abernethy.
Thank you, Mr. Speaker. This is a long question or a question demanding a long answer, but I’ll do my best to do it in a short period of time. The northern allowance is a negotiated benefit and it cannot be unilaterally changed or reduced or eliminated by the GNWT.
Many, many years ago – in the ‘90s – we used to have a housing allowance and a vacation travel assistance allowance. Those were eliminated as part of a negotiation. As a result, housing was rolled into the salary. At that time, there was a significant increase in salary, whereas VTA wasn’t. VTA became part of what is known as the northern living allowance.
On top of that, we’ve also calculated in a transportation component, which is the old VTA plus a cost of living component, which is based on a basket of goods and includes things such as food purchase from store, household operations, house furnishings and equipment, operations of automobiles and trucks, recreation, clothing and footwear. It does not compromise housing or electricity.
This is, as I’ve indicated, a negotiated amount. Yellowknife was selected as the base, and the bottom line of the northern living allowance is it’s intended to equalize the communities that are outside of Yellowknife to the rate and cost of doing business and living in a community like Yellowknife. It is for the North, it’s about the North, and it’s trying to provide equal opportunity for GNWT employees. And remember that the northern living allowance is just for GNWT employees who live outside of the centre. Thank you, Madam Speaker.
It’s “Mr.” Speaker, Mr. Abernethy.
---Laughter
I want to thank the Minister for that explanation. I realize that this is a difficult topic to discuss, but I am a little concerned that Yellowknife employees may be at some kind of a disadvantage. So one of the things that the Minister referenced was a basket of living expenses, I guess you would call it. It struck me that this basket does not include transportation. Transportation is outside of this basket. The other thing that is outside of this basket is mortgages.
So can the Minister explain, from his experience in negotiating this particular issue, why transportation and mortgage expenses are not included in the basket of living expenses? Thank you.
I indicated in my previous response that transportation is one of the primary components of this. There are two components. There is transportation, which used to be the VTA, and then there is the cost of living component.
If you go back and look at the history of negotiations over time, when we got rid of the housing allowance in the Government of the Northwest Territories in the ‘90s, that amount was negotiated by way of an increase into the base salaries of all GNWT employees. So housing has already been incorporated in. If you look at the increases that have occurred to the salaries over many years, the increases that have been negotiated exceed CPI by over 10 percent over the last 12 years. That is where that particular thing is negotiated.
We also need to remember that northern allowance is non-pensionable. The union has – and it makes sense – focused on increases to areas that are pensionable as opposed to non-pensionable. This allowance is intended to equalize the communities to Yellowknife rates, and it works and it is a negotiated formula and the union hasn’t sought to renegotiate that formula. Thank you, Mr. Speaker.
I totally agree with the principle for equalizing rates for our employees across all of our communities.
The Minister mentions that the union has not asked to evaluate or do any kind of revisiting of this particular methodology. I’d like to know from the Minister when the last time was that this methodology was reviewed. When was the last time it was looked at across the territory and was there an evaluation to determine if the fact that Yellowknife is the base rate is actually appropriate still? Thank you.
Once again, going back in time into history, the VTA that we used to have in the ‘90s became part of the component of the northern allowance. When we factored in the transportation component, that transportation component works out to about $3,400 in Yellowknife and we’re trying to equalize to those rates. Those are no longer realistic rates. The cost of getting out of Yellowknife has actually decreased in the last number of years as opposed to increased. So if we were to actually base the rates on the cost of getting out of Yellowknife, it would be a drop, and that hasn’t been negotiated.
I know for a fact we haven’t negotiated northern allowance changes for the last two Collective Agreements, but I can’t tell you for sure when the last time that occurred. Thank you, Mr. Speaker.
Thank you, Mr. Abernethy. Final, short supplementary, Ms. Bisaro.
Thank you, Mr. Speaker. Thank you to the Minister. My last question has to do with transportation, as he just mentioned. I appreciate that the transportation costs are rolled in. I appreciate that the living allowance has been rolled into salaries. It’s my understanding that transportation is weighted fairly heavily in the criteria that make up the methodology that determines northern allowance, so I’d like to know from the Minister why transportation is weighted so heavily compared to, say, living costs.
The transportation component provides compensation to communities relative to the value of the cost of return transportation between Yellowknife and Edmonton via air and/or road. The cost of living component provides compensation to communities relative to the average expenditures for a food basket of goods and services compared to Yellowknife. Yellowknife would be a base. We would be looking at the cost of goods or the basket of goods in every other community as part of the formula to determine what other communities are getting, but if we’re using Yellowknife as a base, we need to make sure that it is an appropriate cost, and that cost was negotiated between the Government of the Northwest Territories and the UNW. As I have indicated, the cost of transportation out of Yellowknife has actually decreased but they haven’t bothered to negotiate down the price.
Right now, we have a formula – it works – that we use, and the union is supportive of that formula.
Thank you, Mr. Abernethy. The Member for Inuvik Boot Lake, Mr. Moses.
