One of St. Joe's mental health treatment units is closing — and this is just the start of a series of cuts at one of Hamilton's biggest healthcare organizations, CUPE warns.

St. Joe's management says this move is part of a restructuring process meant to make the organization more efficient that won't result in any loss of beds for patients, but union leadership says this just the start of a larger process and problem.

"The looming closure of Harbour North East number two, a seven-bed mental health treatment unit at St. Joseph's Healthcare in Hamilton is just the beginning of a series of coming cuts to hospital services," said Domenic DiPasquale, president of Canadian Union of Public Employees, Local 786, which represents 1,700 staff at the hospital.

CBC News first reported on Wednesday that management at St. Joseph's Healthcare Hamilton needs to find $26 million in cost savings to balance the hospital's $550-million budget by 2016/2017.

St. Joe's is entering a period of "extreme cost restraint," that includes a hiring freeze on new positions and "careful" consideration of sick time and overtime, according to emails from President Dr. David Higgins to staff. 

On Friday, Higgins told CBC news that the unit itself is closing, but its beds and patients will be absorbed into the rest of the organization's bed pool. "There will be no bed loss for St. Joe's over the next year. None," he said. The move was made because the unit was small with a large number of staff, and therefore running "inefficiently," he said. 

However, some staffing changes will be made. There will be 12 full time equivalent positions cut as a result of the closure, Higgins said, noting that the organization will make efforts to make those changes through vacancies and early retirements instead of cutting jobs.

Funding not rising with inflation

In a press release, DiPasquale said that "inadequate" provincial funding has "fuelled successive budget deficits and bed closures and service and staff cuts at St. Joe's."

The $26 million shortfall "could translate into many staff reductions, since 85 per cent of all spending is on salaries, as well as more bed closures and program cuts," DiPasquale said.

"Staff at the hospital are being crushed by provincial funding cuts on the one hand which are slashing our budgets, year after year, in real terms and an inexplicable, indefensible explosion in the ranks of supervisors and managers to direct a rapidly shrinking work force," DiPasquale said.

The biggest pressure St. Joe's is facing, Higgins says, a lack of funding to account for inflation.

Inflationary pressures account for about $22 million of the $26 million in cuts that need to be made, the organization's president says. That's felt most from negotiated salaries, supply and medicine costs that became more expensive as the Canadian dollar dropped and the rising costs of building expenses like hydro and gas.

"Ontario's hospitals are the least expensive and most efficient in the country and they are starved of operating revenue. It's time for the provincial government to provide hospitals with a real increase in funding," DiPasquale said. "We are also asking the ministry to review the huge growth in non-essential supervisory and managerial staff at St. Joseph's, which is happening while the front line workforce is being axed."

Horwath slams cuts

Provincial NDP leader Andrea Horwath denounced budget cuts at St. Joe's Thursday, saying a freeze on hospital funding is hurting patient care province-wide.

"Like every Hamiltonian, I am deeply concerned to learn that St. Joseph's Healthcare Hamilton is being forced to cut $26 million," Horwath said in a statement.

"There is no question that these cuts are the direct result of the Liberal government's freeze on hospital funding. The Premier is responsible for these cuts and she has the power to stop them."

The Liberal government has frozen hospital budgets for years, and has said it wants more care provided in home and community-based settings instead of much more expensive hospitals.

"We understand that there is a transition in communities where there is more community care that is being set up," Premier Kathleen Wynne said earlier in the fall. "We will continue to increase health care funding as we go through the transformation."

The Liberals promised during last year's election they would not cut front-line health-care services.

adam.carter@cbc.ca