Ensuring Sustainable Public Sector Wages to Protect Front-Line ServicesPublished on April 16, 2019
Government to Launch Public Sector Compensation Consultations
Ontario's government is working for the people to restore transparency, accountability and sustainability to the province's public finances — all while preserving the critical front-line services on which people depend.
Today, Peter Bethlenfalvy, President of the Treasury Board, delivered a keynote address to the Canadian Club. As part of his speech, The Path to Balance: Protecting What Matters Most, Bethlenfalvy announced the government's intention to consult with Ontario public sector employers and bargaining agents about how to achieve reasonable public sector compensation growth.
"We owe it to Ontario's taxpayers to address our fiscal situation head-on, and ensure every dollar is spent wisely," says Bethlenfalvy. "The challenge of our generation is to make choices that protect what matters most, like front-line programs and services, while confronting intergenerational inequity and future economic shocks."
Building on the success of the Planning for Prosperity consultation, which generated over 26,000 ideas from the people of Ontario, the Government of Ontario will engage with public sector employers and bargaining agents to explore how compensation growth can be managed in a way that results in wage settlements that are modest, reasonable and sustainable.
Public sector compensation represents roughly half of all expenditures for the Government of Ontario, totalling $72 billion annually, and employing over 1 million people across multiple sectors.
Feedback received through the consultations will directly inform the government's next steps on responsibly addressing growth in compensation and potential measures could include:
- Voluntary agreement to wage outcomes lower than the current trend;
- Trade-offs that will lead to reductions in compensation costs; and
- Consideration of legislative measures.
"As our government continues to deliver relief to families, we are putting people first by leveraging our service delivery partners' collective knowledge and ideas. This budget season, we look forward to having impactful conversations that address the sustainability of public sector wage trends in Ontario," said Bethlenfalvy.
- Every 1 per cent increase in compensation-related spending translates into $720 million in additional costs.
- Collectively, provincial public sector organizations employ over 1 million workers across multiple sectors. Of this total, 71 per cent are unionized.
- The government has identified $3.2 billion in savings and has reduced Ontario’s $15 billion inherited deficit by $1.5 billion to date.