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To: BPS Employers

Archived Backgrounder

To: BPS Employers

RE: Provincial Compensation Framework

Ministry of Finance

In March, when I tabled the 2012 Budget, Strong Action for Ontario, I laid out a plan to keep Ontario on track to balance the budget by 2017-18.  I indicated then that eliminating the deficit was the single most important step the government could take to grow our economy, and protect and create jobs.  I said the government was committed to getting its fiscal house in order while protecting the services that matter most to Ontarians: health care and education.

That strong action includes a plan to transform the broader public sector (BPS).

Our partners in the BPS play critical roles in providing services to Ontarians and the McGuinty government has always valued, and will continue to value that work. Compensation for the BPS accounts for more than 50 per cent of all Ontario government spending.

The government is asking all Ontarians to do their part in returning the budget to balance.

As you know, we have asked teachers and doctors to hit the pause button for two years. And now we are asking others in the BPS to do the same.

To meet the government's fiscal targets, the fiscal plan provides no funding for incremental compensation increases for new collective agreements.

The government respects the collective bargaining process and will leave existing agreements intact.  The government will also insist that its partners continue providing high-quality health care, education and other key public services to Ontario families.

Ontario is expecting its bargaining partners to meet the following criteria:

  • For two years, collective agreements should not allow for increases in compensation.  This includes wages, performance pay and benefits.  Any movement through an established grid must be fully offset from within the total compensation package.  Should parties wish to enter contracts of more than two years, those contracts should contain no increases in compensation during the additional period.
  • The Broader Public Sector Accountability Act, 2010, implements compensation restraint measures for designated executives at hospitals, universities, colleges, school boards and designated organizations.  The restraint measures are effective March 31, 2012, and are in place until the province ceases to have a deficit.
  • Decisions related to compensation for non-executives who are not governed by collective agreements should live within fiscal targets.

These criteria are consistent with the approach the government is taking with teachers' compensation and doctors' fee for service arrangements.

In addition, there should be no agreement to terms that impose longer-term costs or restrictions on service delivery.

You, as an employer, are expected to share these parameters with your bargaining agents.  The McGuinty government believes being transparent about our expectations will support the collective bargaining process and good-faith bargaining.

As the 2012 Budget states, where agreements cannot be reached that are consistent with the government's plan to eliminate the deficit, the government is prepared to propose necessary administrative and legislative measures.

In addition, the 2012 Ontario Budget announced a number of initiatives intended to improve the sustainability, affordability and efficiency of pension plans in the Broader Public Sector.  The government is currently conducting consultations on the affordability and sustainability of public sector pension plans.

Ontario is facing some challenges.  Strong action is required to eliminate the deficit, protect jobs and encourage the creation of new jobs as well as economic growth.

I know I speak for my Cabinet colleagues when I say that we appreciate everything that all parties are doing to help move Ontario forward.


Original signed by

Dwight Duncan

Deputy Premier

Minister of Finance



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