Ontario has to pay public sector workers $6B and counting in Bill 124 compensation

Ontario is so far on the hook for more than $6 billion in payments to broader public sector workers as a result of the provincial government's wage restraint legislation being found unconstitutional.

Bill 124 capped salary increases for broader public sector workers at one per cent a year for three years, but after the Court of Appeal for Ontario ruled it unconstitutional the government repealed it.

Since a lower court first found the law unconstitutional in 2022, unions with so-called reopener clauses in their contracts have been seeking retroactive pay increases above the one per cent a year and in most cases have been awarded considerably larger amounts.

Senior government officials not authorized to speak publicly about the costs confirm to The Canadian Press that those awards so far add up to $6,000,800,000.

Speaking at a news conference in Barrie, Ont., Friday morning, Premier Doug Ford confirmed to CBC News that the payout figure is correct.

"When we first took office, we walked into a bankrupt province and we had to keep things in control," Ford said. 

Ford said capping salary increases at one per cent a year for three years allowed the government to keep people employed, "give them a paycheque, put money into health care and education, into infrastructure, and we did that."

But according to Ford, "times have changed, inflation has gone up," and workers "do deserve more. I agree with that and we'll keep moving forward and supporting our hard working front-line workers that work at the province at all levels, they're great people."

'This was never the right thing to do': Ontario NDP

Bill 124 demonstrated that the Ford government does not care about public sector workers, said Jamie West, labour critic for the Ontario New Democratic Party (NDP) and MPP for Sudbury.

"Doug Ford is trying to pivot and say that this was the right thing to do. This was never the right thing to do," West told CBC Toronto in response to the premier's comments.

"I completely disagree with this premise, and I don't believe what he's saying about saving jobs. What he's trying to do with that statement is save face."

The province's financial accountability officer highlighted in a report earlier this month that compensation — largely in the health and education sectors — for the law known as Bill 124 caused the government to spend billions more than it planned this year.

The confirmation of the cost of the reopener payments so far comes as Finance Minister Peter Bethlenfalvy is set to introduce next year's budget in less than two weeks.

In the minister's last fiscal update ahead of the budget, the release of the third quarter finances last month, he projected that Ontario would end this year with a $4.5 billion deficit, which is larger than the $1.3 billion he forecasted in last year's spring budget.

The province has used what the FAO has highlighted as an unusually large contingency fund to offset some of the increased compensation costs, with $3.3 billion left in the fund at the time of the third-quarter finances report.

The FAO has said pay increases to compensate public sector workers for Bill 124 could end up costing the government more than $13 billion.

Since the law was first found unconstitutional by a lower court, arbitrators have awarded additional retroactive pay to several groups of public employees, including teachers, nurses, other hospital workers, public servants, Public Health Ontario employees ORNGE air ambulance paramedics, and college faculty.

Employees of the Liquor Control Board of Ontario are among the most recent to be awarded back pay. An arbitrator awarded them an additional 6.5 per cent over the three years of their last contract, the Ontario Public Service Employees Union announced this week.