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NAPE offer to cost taxpayers $250M, sources confirm

​CBC News has learned that the provincial government's offer to pay out severance to members of NAPE will cost taxpayers $250 million.

Premier says severance exists on the books 'whether you pay it out in 2017 or ... you pay it out in future'

Jerry Earle is the president of NAPE. (Ted Dillon/CBC)

​CBC News has learned that the provincial government's offer to pay out severance to members of NAPE will cost taxpayers $250 million.

Close to 20,000 union members of the Newfoundland and Labrador Association of Public and Private Employees are in the process of a ratification vote on the four-year deal.

The offer includes a wage freeze, a no-layoff clause and a severance payout to anyone with more than a year of service.

Under the current contract, only employees with nine years of service would be eligible for severance if they leave their job. If the new contract is ratified, only 12 months would be needed to qualify. Severance for current employees will now be tied to how many years they've worked, but will be capped at 20 weeks.

The employees will get one week of pay for each year of service. That means an employee with 10 years service will get 10 weeks pay. Sources have confirmed that amount adds up to a quarter of a billion dollars.

Anyone hired after the deal is accepted would not be eligible for severance, nor would those with less than a year of service. 

Ball: liabilities exist, pay now or later

Premier Dwight Ball said Wednesday he wants to respect the negotiations that got both sides to this point and not comment specifically on the proposed deal. 

But he did say that, "when it comes to severance, there are liabilities that exist on the government's balance sheet," whether it's for managers or unionized employees. 

Premier Dwight Ball told reporters Wednesday that severance exists on government books, whether it's paid out now or later. (Eddy Kennedy/CBC)

"So at what point that gets paid out, and what the process looks like, that liability exists on the government finances," he told reporters during a media availability called in response to the Trump administration's decision to impose a duty on all Canadian newsprint exported to the United States.

"It's there whether you pay it out in 2017 or it's there whether you pay it out in future dates."

Ratification meetings underway

Sources have told CBC News that government expects to have the $250-million payout paid off in less than a decade, and would then begin saving money annually because there would be no accumulation of severance.

Other sources said after taxes are recouped from the recipients, the actual cost to the province will be closer to $160 million.

The issue was raised and rejected during the last round of negotiations in 2013.

NAPE began ratification meetings on Sunday. The votes will be held across the province for the next few weeks, with a result expected by the end of the month.

Finance and union officials have both declined comment while the process is ongoing.

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