The province spent an estimated $48.2 billion on public sector salaries last year, not including pensions and benefits
The Doug Ford government would likely need to find an extra $8.4 billion to increase public sector pay packets if a current court challenge to its wage restraint legislation is successful, a new report Wednesday from the Financial Accountability Office of Ontario (FAO) says.
The FAO report looked at public sector compensation, the Bill 124 legal challenge, inflation and collective bargaining over the next few years to determine the bottom line for government coffers.
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More than 40 Ontario unions representing about 270,000 workers have launched a court challenge to the Ford government’s wage cap, which limited annual salary increases to 1% a year for three years.
The bill has saved the government $9.7 billion between 2019 to 2026-27, the FAO estimates.
“If the ongoing court challenge to Bill 124 is successful, then we estimate that the cumulative cost to the province could reach $8.4 billion through 2026-27,” Ontario Chief Financial Accountability Officer Peter Weltman said.
The province spent an estimated $48.2 billion on public sector salaries last year, not including pensions and benefits, with $19.1 billion to school board employees, $18.2 billion to hospital staff, and $8.3 billion to ministry and agency workers, the FAO says.
“Ontario’s total salaries and wages spending has grown from an estimated $36.3 billion in 2011-12 to $48.2 billion in 2021-22, representing average annual growth of 2.9%,” the FAO says in a statement. “Ontario’s total salaries and wages spending has grown from an estimated $36.3 billion in 2011-12 to $48.2 billion in 2021-22, representing average annual growth of 2.9%.”
Ontario’s 6.3 million paid workforce last year was made up of 4.8 million private sector employees and 1.6 million federal, provincial and municipal workers.
LOWER THAN MUNICIPAL, FEDERAL
The average wage for an Ontario public sector worker was $69,259 a year, lower than municipal employees at $70,418 and federal employees at $89,574, the FAO says.
Over the past decade, Ontario public sector workers saw average annual increases of 1.6%, less than other public workers but higher than the 0.9% private sector employees received.
Inflation, staffing shortages and collective bargaining could all push public sector wages higher, the FAO says.
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“We estimate that elevated inflation could lead to $6.6 billion in higher spending cumulatively over the five years to 2026-27,” Weltman said.
Education Minister Steven Lecce has said it would cost in the billions of dollars to replicate a current bargaining ask by CUPE Ontario school workers across the entire sector.
The Ontario Public Service was comprised of 654,641 workers in 2021, or about 10% of paid workers in the province, including 236,584 in hospitals, 285,859 in school boards, 46,224 in colleges, and 85,974 in government ministries and agencies, the FAO says.
aartuso@postmedia.com
