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Protecting a Sustainable Public Sector for Future Generations Act, 2019

Backgrounder

Protecting a Sustainable Public Sector for Future Generations Act, 2019

Treasury Board Secretariat

Today, Peter Bethlenfalvy, President of the Treasury Board, introduced the Protecting a Sustainable Public Sector for Future Generations Act, 2019. The proposed legislation would protect services, front line jobs and workers now and in the future by establishing a fair and reasonable approach to managing compensation, as the government tackles Ontario's debt.

Key Facts:

  • The Province's net debt has grown to more than one-third of a trillion dollars. In 2019-20, the government is forecasting $13.3 billion in interest payments to service that debt, which is $1.5 million of interest paid every hour of every day, before a single dollar can be spent on schools, hospitals or transportation.
  • Through the implementation of the debt burden reduction strategy, the government is protecting services that matter most to people, and helping to ensure future generations are not left to deal with the burden of past financial mismanagement.
  • Public sector compensation represents roughly half of all government expenditures, totaling $72 billion annually. 
  • An average public sector employee making $64,000 could be eligible to receive up to an additional $1,900 over a three-year period, not including any salary range movement they may be eligible for. 
  • Every one per cent increase in compensation-related spending translates into $720 million in additional costs.

Why is the government taking action now?

Protecting front-line services, public sector jobs, and making Ontario fiscally sustainable will mean that everyone needs to do their part. Our government for the people will continue to work with all public sector employers, employees and bargaining agents to protect what matters most.

What is the government doing to manage compensation and protect programs and services?

The government is introducing the Protecting a Sustainable Public Sector for Future Generations Act, 2019. The proposed legislation would ensure public sector compensation reflects the province's current fiscal reality. In Spring 2019, the government consulted with provincial public sector employers and bargaining agents, on how compensation growth can be managed in a way that results in a fair and reasonable path forward that will protect vital services and front-line jobs and workers. This is a fair, consistent and time-limited approach that applies across the provincial public sector.

Who would the proposed Protecting a Sustainable Public Sector for Future Generations Act, 2019 apply to?

This legislation, if passed, would apply to bargaining and non-bargaining employees, managers and leadership whose compensation is not otherwise moderated, across the provincial public sector, including:

  • Provincial authorities, boards, commissions, corporations, offices or organizations in which a majority of directors, members or officers are appointed or chosen by the province (including Ontario Power Generation, Independent Electricity System Operator and Ornge)
  • School boards
  • Colleges and universities
  • Hospitals
  • Long-term care homes
  • Children's aid societies
  • Transfer payment recipients who received more than $1 million in annual funding in 2018
  • The Ontario Public Service

As drafted, it would not apply to municipalities (including municipal authorities, corporations, boards or long-term care homes), the Ontario Medical Association Physician Services Agreement, or for-profit organizations. It would also not capture Broader Public Sector (BPS) executives covered by the Broader Public Executive Compensation Act, 2014 whose wages have been frozen for much of the last decade.

How would the Act enable the government to manage compensation growth?

  • Legislation would set requirements that could allow for up to one per cent increases to salary and overall compensation for unionized and non-unionized employees in the Ontario public sector.
  • The provisions, if passed, would apply for a period of three years upon the expiry of existing collective agreements.
  • Existing collective agreements would not be revised based on the proposed legislation, and it would not impede the collective bargaining process.
  • The proposed legislation would not impose wage freezes, wage rollbacks or public sector job losses. Public sector employees would still be able to progress through salary ranges, be eligible for compensation increases, and be able to negotiate terms and conditions, including compensation. 
  • The proposed legislation, if passed, would limit future annual wage increases to a maximum of one per cent per year for a three-year period across the provincial public sector. A public sector employee making $64,000 could be eligible to receive up to an additional $1,900 over a three-year period, not including any salary range movement they may be eligible for.

Will the government continue to consult with interested stakeholders?

The government consulted with public sector employers and bargaining agents in Spring 2019 to explore how compensation growth can be managed in a way that results in public sector wages that are reasonable and sustainable.

All interested and impacted stakeholders are asked to review the draft measures and continue to provide feedback over the summer, at ontario.ca/page/protecting-sustainable-public-sector-future-generations-act-2019. The government is also continuing to accept feedback from public sector bargaining agents and employers that participated in the government's Spring 2019 consultations by email to psconsultations@ontario.ca.

The government will continue to consider any feedback received when deciding a path forward.

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