TORONTO-The Ontario provincial government and 54,000 striking government workers are locked in a dispute over pension and severance rights.
The Ontario Public Service Employees Union argues the government is laying off workers in their 50s without a full pension and with little chance of finding a new job.
Longtime workers should be offered a full pension, which the provincial workers' pension fund can afford to pay, the union contends.
But the provincial government says the workers had been offered that deal in the past when they reached the early retirement threshold but many turned it down, and now its too late to reconsider.
The union members have been on strike since February.
The pension issue arose because of the Ontario government's budget-tightening decision to significantly reduce the number of provincial workers.
Between 13,000 and 27,000 of the 81,000 government workers from a broad spectrum of positions will be laid off.
"It seems it's going to settle at around 19,000, and of those 6,000 jobs will be privatized," said a spokesman for OPSEU.
The government is making little provision for the fired workers, he said.
"Most companies when they are downsizing try to do it by attrition or help people get to retirement as quickly as possible and they do it in a reasonable way. This government clearly isn't," said the spokesman said.
One of the central points of disagreement is the government's unwillingness to offer what is known as the "Factor 80" early retirement provisions for all workers being laid off, he said.
In Canada, workers often receive early retirement benefits if their age and years of service total 80, the spokesman explained.
"The employer is not required to make contributions to the pension fund, but it is required to make sure that there are sufficient funds" to all pension obligations, he said.
The government workers' pension fund has $5 billion Canadian ($3.67 billion) in assets and only needs to grow at a rate of 3.5% a year to fund pensions for fired workers who meet the Factor 80 threshold, the spokesman said.
The government disagrees.
Provincial workers are given a three-month window to opt for a Factor 80 retirement when they reach the threshold, and routinely 40% to 50% of the workers take the option, said Angelo Pesce, special advisor to the Ontario cabinet.
If the workers who decided to continue working were offered the same deal now, there would be a 70% to 75% acceptance and the pension fund could not afford the increase in retirees, he said.
"It was (calculated) on 40% to 50% uptake and that can't be changed. That was the risk they took when they let the window go by," Mr. Pesce said.