Following are speaking notes for Loyola Sullivan, President of Treasury Board and Minister of Finance, from a media briefing today (April 12) at Confederation Building:

Today, I want to give the daily update on how the systems are managing and I also want to briefly explain government�s latest offer to the unions.

We are continually monitoring all systems throughout the province. As you know, the K-12 school system is closed for the Easter break, and the College of the North Atlantic campuses are also closed for student break.

The health system continues to provide a safe level of service to patients, clients and residents with the resources available. We know people are experiencing delays but I want to stress that they are receiving the essential services. The priority is to focus on services first for those with the greatest need. We will continue to monitor events on a daily basis. I want to thank the public for their co-operation and ask for their continued understanding and help.

On Friday, Government presented its latest offer to NAPE and CUPE. There still seems to be confusion over the details of that package, and I want to clarify our position. The proposal outlined the major outstanding issues: sick leave, pensions, classification system, hours of work for school boards and wages.

With sick leave, union members are currently entitled to 24 sick days per year, with an accumulated maximum of 480 days. Other types of leave are also available - between 15 and 25 days of vacation leave, three days of family responsibility leave, up to 14 statutory holidays, and an allowance for bereavement leave. There is no doubt that our employees deserve fair benefits; however, we have a very generous benefits package. Sick leave costs our province tens of millions of dollars each year, and we must try to reduce that cost.

Current employees will continue to get 24 sick days. However, for new employees, government has proposed 12 sick days per year with an accumulated maximum of 240 days.

For pensions I want to clarify, once and for all, that pension indexing is off the table. Government will continue with its contributions to enable pension indexing. The outstanding issue on pensions is that the unions are demanding a guarantee that pension benefits will not decrease or contribution rates will not increase. Employees should rest assured that government has no intention of changing employee benefits or contribution rates.

We respect the practice of discussing such changes rather than imposing them. However, it would be inappropriate for government to relinquish the legal right to make such changes given the large unfunded liability of the pension plan. Government has proposed to give the unions six months notice and to consult with them prior to any changes being made to benefits or rates.

In terms of a new classification system, both government and NAPE and CUPE have agreed that a new system is needed. It will take four years to develop. The total cost of a new classification system is unknown, a risk government cannot accept given our fiscal situation. We want to negotiate with the unions for a limit on the annual and total costs of the new system. The unions are rejecting the idea that a limit on total cost should even apply, which essentially guarantees the unions a blank cheque. This is simply not sound financial management.

Another issue surrounds the Warren Report. Under this, NAPE and CUPE essentially have asked government to guarantee the number of janitors, secretaries and maintenance workers in school boards, according to fixed standards developed in that report. Government, as an employer, needs to maintain the ability to determine the number of workers it will employ in any job category. We must have flexibility to respond to a changing school system.

The final issue surrounds wages. Government just presented a very difficult budget; one which required tough but responsible, decision-making and enabled us to reduce the deficit by $240 million, yet we still have the highest deficit in our province�s history. In order to continue to restore our fiscal situation during the next four years, wage growth must be moderated. That is why we have asked employees to accept a four-year wage deal which includes a two-year wage freeze followed by two years of wage growth at two percent annually.

NAPE�s and CUPE's demands, applied across the public service, would amount to approximately $200 million a year by the fourth year - which would negate all the hard work we have tried to accomplish with this budget.

Throughout the negotiations, government had proposed some financial reductions to the benefit packages of existing employees in the areas of pension indexing, sick leave entitlements and severance pay. However, despite the contribution some of these reductions could make to the government's financial problems, these proposals were withdrawn by government in the spirit of reaching a deal.

The government wishes to conclude a fair and affordable deal with NAPE and CUPE.

2004 04 12                                         4:35 p.m.