The province is so far responsible for over $6 billion in payouts to wider public sector workers due to the government’s wage restraint legislation being ruled unconstitutional. Bill 124 caps salary increases for wider public sector workers at 1 per cent annually for three years. The government has since repealed the legislation after a lower court ruled it unconstitutional in 2022. Since then, unions with reopener clauses have been pushing for retroactive pay increases over the one per cent annual limit, and in most cases, have been awarded significantly more.
According to a report released earlier this month by the province’s financial accountability officer, compensation — particularly in health and education — for the bill known as Bill 124 has resulted in the government spending billions more than planned this year. In the minister’s latest fiscal update ahead of this year’s budget, released last month, the minister predicted Ontario would end with a $4,5 billion deficit, more than the $1,3 billion he predicted in last year’s spring budget.
The province has made use of what the (FAO) has called an “extraordinarily large contingency fund” to cover some of the additional compensation costs. As of the province’s third-quarter financial report, the contingency fund stood at $3,3 billion. According to the FAO, pay increases to pay public sector workers in the wake of Bill 124 could cost the government as much as $13 billion over the next three years.
Since Bill 124 was first declared unconstitutional by a provincial court in September, the arbitrators have granted retroactive pay increases to a number of public employee groups, including: Teachers and nurses; Other hospital workers; Public servants; Public Health; Office of Ontario Non-Governmental Employees (ORNGE) air ambulance paramedics; and College faculty.
The latest to receive back pay were employees of the now-ousted liquor control board of Ontario, with an arbitrator awarding them a 6.5% increase over the three-year term of their most recent contract.
