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Capping Executive Compensation and Freezing Pay for Public Sector Managers

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Capping Executive Compensation and Freezing Pay for Public Sector Managers

McGuinty Government Taking Strong Action to Control Spending, Eliminate Deficit

Ministry of Finance

Ontario is proposing to cap compensation for its executives and put in place a two-year pay freeze for managers who are eligible for performance pay.  Managers across the Ontario Public Service (OPS) would see a three-year freeze. 

These measures are being introduced because the government believes everyone has to do their share to help eliminate the deficit. Ontario has already asked some of its partners, like teachers and doctors, to take a two-year pay freeze.

Under the plan, executive pay would be permanently capped at no more than double the Premier's salary -- $418,000 per year. Public sector managers would not earn any more money for the next two years than they did last year.  The amounts shown on T4 slips would not be able to increase, except under special circumstances such as a mother returning from maternity leave. The freeze would also decrease future pension expenses.

The McGuinty government is taking strong action to achieve its fiscal targets by reducing costs while protecting front-line services.  This announcement builds on the restraint initiatives that the government has implemented since 2008.

Quick Facts

  • Compensation costs account for the majority of Ontario-funded program spending, either paid directly through the OPS or as part of the government’s transfer payments to universities, hospitals and other public-sector partners.
  • The proposed freeze on compensation for managers in the OPS would save the government approximately $12 million this year.
  • To eliminate the deficit while protecting the health and education services families most rely on, the McGuinty government’s plan requires strong management of current and future compensation costs, including wages, benefits and pensions.
  • These measures apply to the Ontario Public Service, government agencies and the broader public sector. Municipalities and local boards would be excluded from the scope of the announced measures.
  • The 2011-12 Public Accounts revealed that the province's results for the 2011-12 fiscal year were $3.3 billion ahead of the plan projected in the 2011 Budget. This marks the third consecutive year in which the province has improved on its fiscal projections.

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“The McGuinty government respects the hard work of our public sector employees. These measures are necessary to help us meet our fiscal targets and we are asking everyone to do their share. More than half of government costs go to wages and benefits — this pay freeze would help us protect public services and jobs.”

Dwight Duncan

Minster of Finance

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