City Wage Increase 26% Over 2 Contracts

 

Peace at the Bargaining Table,
Pressure at the Kitchen Table

Two CUPE contracts. Six years. Nearly 26% compounded — and City management rides the same wage escalator.

A question for your Mayor and Council; " who bargains on behalf of the Nanaimo taxpayer? Do exempt and management staff get the same increase? Does Council consider taxpayer affordability?"

There is nothing wrong with labour peace. A city that cannot maintain a stable relationship with its workforce has a serious problem. Residents expect roads maintained, parks looked after, permits processed, facilities operated, and municipal services delivered without constant labour disruption.

But Nanaimo taxpayers should not confuse labour peace with taxpayer affordability.

NanaimoNewsNOW reports the City of Nanaimo and CUPE Local 401 are awaiting the final official document for a new three-year collective agreement covering about 780 unionized City workers. The agreement is retroactive to January 1, 2026 and expires December 31, 2028.

The new agreement provides general wage increases of four per cent in each of the three years. Stated one year at a time, that may sound modest. But wage increases do not simply add — they compound.

The new 2026–2028 CUPE agreement equals approximately 12.49% compounded over three years.

But that is only half the story.

The previous CUPE Local 401 agreement, covering 2023 through 2025, included wage increases of 4% in 2023, 4% in 2024, and 3.5% in 2025. That earlier contract worked out to approximately 11.95% compounded.

Put the two agreements together and the sharper affordability issue becomes clear.

CUPE wage rates rise approximately 25.92% compounded from 2023 through 2028.

Contract Period	Annual Wage Increases	Compounded Increase
2023–2025 CUPE Agreement	4% + 4% + 3.5%	11.95%
2026–2028 CUPE Agreement	4% + 4% + 4%	12.49%
Combined 2023–2028	Six years of increases	25.92%

What Happened to “Keeping Up With Inflation”?

Labour contracts were once commonly justified as a way of keeping wages in line with inflation. That argument deserves a closer look.

For the first CUPE agreement, we now have actual B.C. Consumer Price Index numbers. B.C. CPI rose 3.9% in 2023, 2.6% in 2024, and 2.1% in 2025. Compounded, that works out to approximately 8.84%.

Over the same three years, CUPE wage rates rose approximately 11.95% compounded.

Wages vs. CPI: 2023–2025

Measure	Annual Changes	Compounded Result
B.C. CPI	3.9% + 2.6% + 2.1%	8.84%
CUPE Wage Increases	4% + 4% + 3.5%	11.95%
Difference	CUPE above B.C. CPI	About 3.11 percentage points higher

The future CPI numbers for 2026, 2027 and 2028 are not yet known, so no one can honestly claim the full six-year comparison with actual inflation yet.

But there is another fair comparison. The City’s own financial planning assumptions refer to a 2% annual increase as the inflation-control target used by the Bank of Canada and the Government of Canada. Against that 2% benchmark, three years of 4% wage increases would produce a compounded wage increase of approximately 12.49%, compared with approximately 6.12% if inflation averaged 2% per year.

If 2% inflation is the planning target, why are wage settlements running at 4% per year?

NanaimoNewsNOW reports that Laura Mercer, the City’s General Manager of Corporate Services, stated the new CUPE contract represents a $2.1 million increase this year in additional City expenses for wages and benefits.

Mercer also stated those increased costs are funded through taxation, fees, charges, and reserves.

In Plain English

The public pays. Whether the money comes through property taxes, utility fees, user charges, or reserves already collected from taxpayers and ratepayers, it still comes from the same public pocket.

And It Is Not Only CUPE

There is another important piece taxpayers should understand.

The City of Nanaimo’s Exempt Salary Administration Policy says the City will provide annual salary adjustments to exempt and management employees that are consistent with the across-the-board increases approved for CUPE Local 401.

In other words, when CUPE wage rates go up, the City’s exempt and management salary bands are also designed to move in step with those increases.

That means the CUPE settlement is not only a union wage agreement. It becomes part of the wider City Hall compensation structure.

So the obvious question becomes: who bargains for the taxpayers?

CUPE has a union at the table. Management has policies that help keep exempt salaries moving with CUPE. Council ratifies the agreement. Staff administer the system.

But where, exactly, is the taxpayer affordability test?

The issue is not whether City workers deserve fair wages. That is too easy a dodge. The real issue is whether anyone at City Hall is asking, with equal seriousness, what Nanaimo taxpayers can afford.

A single contract can be defended as reasonable. A single year’s increase can be explained as necessary. But when two back-to-back CUPE agreements produce an approximately 25.92% compounded increase over six years — and exempt management increases are tied to the same CUPE pattern — taxpayers are entitled to ask a much larger question.

How much more permanent cost can be built into City Hall before the people paying the bills are finally given the same priority as the people negotiating the contracts?

When City Hall talks about labour peace, it is speaking from the government side of the table. When taxpayers open their property tax notices, utility bills, and fee schedules, they see the other side of that peace agreement.

This is not only about wages. It is about staffing levels, service delivery, productivity, department growth, management compensation, and whether taxpayers are being asked to fund a municipal cost structure that is growing faster than many household budgets can absorb.

The Question That Should Be Asked

Before every new wage agreement, staffing expansion, department expansion, or new City program, one question should be front and centre:

What evidence does City Hall have that Nanaimo taxpayers can afford this?

Labour peace is valuable. Nobody should pretend otherwise.

But if that peace is purchased year after year without a hard look at taxpayer affordability, then peace at the bargaining table simply becomes pressure at the kitchen table.

Points to Ponder: City contracts do not end when the ink dries. Wage increases become part of the permanent cost of government — and the taxpayer is always the final funding source.

Source note: The 2023–2025 CUPE wage increases of 4%, 4%, and 3.5% are from the City of Nanaimo’s July 19, 2023 news release and the City’s 2025–2029 Financial Plan. The 2026–2028 wage increases of 4% per year are from the City of Nanaimo’s March 26, 2026 news release. B.C. CPI figures are from BC Stats annual average all-items CPI. The exempt/management salary adjustment language is from the City of Nanaimo Exempt Salary Administration Policy. Compounded calculations by Voice of Nanaimo.