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. 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 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 after his speech that there is no fixed amount the government is looking to save from wage restraint.
New Democrat Catherine Fife said Premier Doug Ford is giving away millions of dollars in “gravy train appointments” to his friends and insiders, while squeezing workers in education, health care and social services.
Ford tried to appoint his long-time friend, Toronto police Supt. Ron Taverner, as Ontario Provincial Police commissioner, and before that to a $270,000 job with the Ontario Cannabis Store. The premier’s principal secretary was appointed to the Ontario Energy Board with an annual salary of about $197,000. And Ford campaign adviser Ian Todd was appointed Ontario’s trade representative to the United States, with a $350,000 salary.
“The Ford government’s new vow to attack the paycheques of public sector workers will send shockwaves of worry through households across Ontario,” Fife said in a statement.
Teachers’ contracts expire in August, and the head of the Elementary Teachers’ Federation of Ontario said he looks forward to negotiating “a fair and reasonable compensation package.”
“ETFO urges the government not to make cuts to, or privatize, public services and assets including public education,” Sam Hammond said in a statement.
The head of the union representing public service supervisors and professionals said his members have done their part to tackle Ontario’s deficit, noting their wages were frozen from 2012 to 2016.
“I remain skeptical of this government’s motivations, but I am always willing to talk,” said Dave Bulmer, the president of AMAPCEO.
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 has already implemented a public service hiring freeze and has frozen the salaries of public sector executives as the government reviews how raises are granted to them. That 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 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.