Newfoundland and Labrador's largest union is telling its members to be patient as contract negotiations drag on, and as the government makes warnings about pending budget cuts.

But in a message to members, NAPE president Carol Furlong also says the union has been building a strong reserve for a strike, should it ever be needed.

"I am delighted to report that financially we are in better shape than ever," Furlong said in a memo posted on the union's website.

She said the union has more than $25 million in cash and assets at its disposal. In the same circular, NAPE members were told the union had $17.4 million in cash in the bank by the end of December.

NAPE says it has been able to save so much because it was allowed to increase member payments toward the fund by 50 per cent.

NAPE told its members that "a strike is the last option" and that it intends to close negotiations that started last spring when a four-year contract expired.

"Having a strong strike fund does more than ensure we have money for a strike," Furlong told members. "We hope it will enable us to avoid a strike."

NAPE represents more than 20,000 workers, the vast majority of which are working in the provincial public service.

The union has rolled out commercials underscoring what it calls a contradiction in how the government describes its finances to its workforce, and a rosier view it presents on the province’s economy to outsiders.

In her memo, Furlong blames the government for triggering a financial problem by transferring $600 million to Nalcor, the Crown energy corporation.

"Clearly, the transfer of cash to Nalcor has created this year’s deficit. A deficit which appears to have been created by design," she wrote.

Cuts will hurt economy: teachers

Meanwhile, the Newfoundland and Labrador Teachers' Association is telling Finance Minister Jerome Kennedy to avoid cuts to the education budget.

President Lily Cole told CBC News on Wednesday that while education has fared well in provincial spending in recent years, the needs of the public school system remain critical.

Cole said that cuts to the education system could wind up hurting the province’s economy, which for several years has been posting some of the country’s strongest rates of growth.

"It's through education, and education of our students, that we will continue to have a prosperous province," Cole said in an interview.

Kennedy, who is chairing pre-budget consultations across the province, has said the upcoming spring budget will include cuts and layoffs.