Ontario PC government considers capping public sector wage increases

Ontario is taking aim at the wages of public sector workers as the Progressive Conservative government tries to balance the budget, including possibly imposing hard caps on pay increases.

Treasury Board President Peter Bethlenfalvy delivered a pre-budget speech Thursday, framing the management of public finances as a "moral imperative."

In order to help eliminate a $13.5-billion deficit, he zeroed in on public sector compensation.

"When we talk about controlling spending or managing expenditures, we must realize that a central component to this
conversation is public sector compensation," he said.

"Let me be clear, our public sector workers have earned their generous compensation. I am amazed every day by their hard work, dedication, and diligence. But we must be honest about what we can reasonably afford while ensuring the sustainability of government programs and services."

About $72 billion a year is spent on public sector compensation, Bethlenfalvy said.

'No decisions have been yet made'

Public sector employers and bargaining agents were sent invitations Thursday to consultations with the government,
including those representing teachers, professors, nurses, Crown attorneys, provincial police officers, power workers and thousands of other public-sector staff.

Bethlenfalvy said ways to curb rising compensation costs could include voluntary agreement to wage agreements lower than current trends, "trade-offs" that would reduce compensation costs, and legislative measures.

The letter to public employers and bargaining agents asks them to consider several ideas.

"While no decisions have been yet made, the government is considering legislated caps on allowable compensation increases that can be negotiated in collective bargaining or imposed in binding arbitration," it says.

Bethlenfalvy said spending by the previous Liberal government that led to a multibillion-dollar deficit jeopardized public
services such as hospitals and schools. 

"Ladies and gentleman, this is a province-building moment that if done right, will see a more sustainable Ontario for this generation and for future generations," he said. "After all, the proper management of public finances is not just a fiscal imperative. It is a moral imperative."

Ontario's annual Sunshine List revealed last week 

Ontario has already frozen the salaries of public sector executives as it reviews how raises are granted to them. The move affects those who make $100,000 or more at public-sector organizations including school boards, universities and hospitals.

The annual list of public sector workers making over $100,000 was published last week and it had increased by 20,000 people from the year prior.

Bethlenfalvy had also earlier directed ministries to not enter into any new funding commitments between mid-February and the fiscal year end of March 31.

The previous Liberal government implemented public-sector wage freezes and for several years dictated "net zero" terms in public-sector bargaining, meaning any wage increases were to be offset by savings elsewhere.