Ontario no longer needs a bunch of tax collectors because they are moving to a harmonized sales tax system. The federal government on the other hand, needs new tax collectors for the same reason. The result is that the Ontario employees are becoming federal employees, but they continue to work in the same offices doing similar work. So what has changed? Two things – they lose their seniority and go into the federal jobs with none – and they pocket a severance package based on the terms of their collective agreement.

This has a lot of knickers in a knot, but I’m not sure what all the outrage is about. The way I see it, Ontario is releasing the employees under the terms of a legal and binding collective agreement. The feds are hiring the same people with no seniority. It seems to me that seniority has value and that value is protected by a contract. The workers are very fortunate that they have another job opportunity waiting for them no doubt, but still they are losing their seniority.

Is it possible for the provincial and federal governments to broker a deal to protect the seniority of the Ontario tax collectors, rather than pay out severance? I don’t think so, because that would devalue the seniority of the federal workers and the issue just spreads. The Ontario government has a problem. I’m sure they would rather not pay out $56 million in severance. I think it’s a fair guess that their lawyers have pointed out the terms of the contract and the potential cost of court action. Another option would be to try to renegotiate the contract based on this special circumstance. More likely, paying out the severance is part of the cost of changing the tax structure. Keep in mind that it wasn’t as if the public were clamoring around, protesting, demanding that Premier McGuinty introduce a harmonized sales tax. It’s a very controvercial move and lots of people are very concerned that it is going to cost them a lot of dough.

If the provincial government decides to abandon the harmonized sales tax scheme, I’m fine with that. They aren’t going to do that. I doubt they are honouring the collective agreement because they are nice guys trying to do what they think is right. More likely they are doing it because they think paying out the severence is the cheapest way through the problem. I think it is reasonable to expect the government to honour their agreements, even if it hurts to have to pay out a pile of money to the displaced tax collectors.