Coercive Bargaining: Public Sector Restructuring under the Ontario Social Contract, 1993–1996

Economic restructuring, which is difficult to engineer even in the private sector, poses particularly serious challenges in highly unionized public sector environments. In 1993, the Ontario New Democratic Party government, which relied on labor support and was committed to collective bargaining, enacted the “Social Contract,†a bill that mandated spending reductions. The Social Contract has been widely criticized for failing to obtain a negotiated consensus between labor and management. This analysis of data from a survey of 1,225 employers finds, however, that the law, as administered, succeeded not only in preserving key elements of collective bargaining and an open and accountable relationship between management and labor, but also in giving those elements a positive role in economic restructuring. The authors conclude that creatively altering the collective bargaining process remains a viable economic restructuring policy option in jurisdictions with highly unionized public sectors.