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Ontario Proposes Compensation Restraint across Broader Public Sector

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Ontario Proposes Compensation Restraint across Broader Public Sector

McGuinty Government Protecting Public Services While Eliminating Deficit

Ministry of Finance

Ontario is planning to introduce and consult on draft legislation that, if passed, would restrain compensation for employees of the Broader Public Sector (BPS), as well as all executives and managers across the BPS and Ontario Public Service (OPS).  If passed, the proposed Protecting Public Services Act would ensure future BPS collective agreements are consistent with the province's goals of eliminating the deficit and protecting the delivery of public services.

The Protecting Public Services Act would, if passed:

  • Restrain compensation for two years for unionized employees of the BPS and require employers to negotiate agreements that do not reduce services.
  • Freeze earnings for two years for managers who are eligible for performance pay in the BPS, OPS and agencies so they would not earn more this year and next than they did last year.
  • Introduce a permanent salary cap for new executives at no more than double the Premier's salary.

The draft legislation also contains changes to ensure that the interest arbitration process is transparent, accountable and efficient. These proposed amendments were previously included in the 2012 Budget Bill.

If passed, the draft legislation would apply its compensation restraint measures upon proclamation, but not to existing collective agreements. It would respect the bargaining process for future collective agreements while ensuring that those agreements are subject to review and approval until the provincial budget is balanced.

All parties in the broader public sector would be encouraged to engage in a full collective bargaining process and employers would confirm whether resulting agreements meet the province's fiscal goals without reducing services.

When the Finance Minister or delegate determines that collective agreements do not meet these goals, parties would be given another opportunity to collectively bargain.  After consultation, a collective agreement consistent with the government's goals may be set by the government.

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 strong action already taken through the Putting Students First Act, 2012 and other measures outlined in the 2012 Budget, such as a five-year wage freeze for MPPs and pay restraint measures for executives at Ontario's hospitals, colleges, universities, school boards and agencies for four years.

Quick Facts

  • This proposed draft legislation would cover 2,295 collective agreements covering approximately 481,000 Ontario public sector workers.
  • 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 hospitals, universities and other public sector partners.
  • Legislation would apply to the Ontario Public Service, agencies and the broader public sector including hospitals, other health sector employers, universities, colleges, hydro entities and not-for-profit entities that receive at least $1 million in government funding.
  • School boards (including the Provincial Schools Authority) and employers in the municipal sector – other than municipal long-term care homes and public health units –would be exempt from the compensation measures regarding collective bargaining introduced for the Broader Public Sector.
  • The 2012 Budget extended the pay freeze for MPPs by a further two years — for a total of five years.

Additional Resources


“A compensation freeze would protect the jobs of thousands of hard-working Ontarians. These are people who provide valuable service to Ontario families. We are focused, more than ever, on eliminating the deficit, which is the most important thing we can do to strengthen our economy and help it create jobs.”

Dwight Duncan

Minister of Finance

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