The Ontario government is expected to save $9.7 billion from the state’s financial oversight project, the controversial Wage Cap Act, which will temporarily limit wage increases for public sector workers.
A report on public sector compensation released Wednesday by the Financial Accountability Office (FAO) showed the financial impact of Bill 124, which limits wage increases to 1% per annum for three years, on government finances and the wages of its citizens. I am emphasizing. public service.
It also warned that inflation, court challenges to the law and an increase in job openings could force states to spend more on wages in the years to come.
Financial Accountability Officer Peter Weltmann said projected savings from Bill 124 could be significantly reduced if ongoing court hearings by unions opposing the law are successful. I was.
His office estimates the state owes $8.4 billion to make up for lost gains, including $2.1 billion in the current fiscal year. (FAO does not expect non-union workers to be compensated for reduced wages, so this is less than the legally estimated savings).
Bill 124, introduced by Prime Minister Doug Ford’s government in 2019 as a cost-cutting measure, has been a focus throughout the pandemic. Unions and opposition politicians have pushed workers out of the medical sector, blaming them for being the main cause of the staffing shortages that currently hamper hospitals.
The law already limits pay increases for most state workers, but 30% of workers will soon negotiate a new collective bargaining agreement that will cover a cap that includes more than 100,000 hospital workers. Yes, says the FAO report. The Civil Service Union of Canada, which has about 50,000 hospital workers, including nurses, will be subject to wage cuts if they sign new contracts.
CUPE’s Ontario Council of Hospital Unions President Michael Hurley said the pay cap is largely hindering women working on the front lines of the pandemic and called for the bill to be repealed to avoid further worker turnover. asked the government.
“It is no wonder hospitals are experiencing a staffing crisis at a time when the very workforce bearing the brunt of pandemic risk is said to be worth wages that lag far behind inflation,” he said. said in a statement.
The FAO reports that state health sector vacancies have nearly doubled since 2019, with 16,020 hospital vacancies in the second quarter of 2022.
As hospitals grapple with staffing challenges and overcrowded emergency rooms, NDP interim leader Peter Tubbs said he fears the situation could only get worse, saying he has weathered the pandemic more than two years ago. Health workers would look elsewhere if salaries were capped after working, he warned. .
Tabuns also challenged the government’s decision to limit wage increases to save money, rather than spending more on the health care system and raising workers’ wages.prefecture The company originally projected a loss of $33.1 billion, but it posted a surplus of $2.1 billion over 2021-2022. in the 2021 budget.
Some emergency rooms were forced to close temporarily over the summer, with wait times to be hospitalized reaching a record 20.7 hours in July.
“If you go to a closed emergency room, I don’t see this as a good thing when you’re one of the parents whose untreated child can’t get pediatric surgery because the hospital is understaffed.” He said. “We cannot balance the budget with the people who have risked their lives in our hospitals and clinics over the last few years.”
According to FAO data, state public service salaries increased by an average of 1% in both 2020 and 2021 as a result of the legislation. This lags behind the federal and local governments, where workers’ average annual wages have risen by 2% and 1.6% respectively.
The state lagged other jurisdictions with an average annual increase of 1.2% from 2011 to 2019, even before Bill 124 took effect.
In response to the FAO report, State Finance Commission spokesman Ian Allen said hospital employment will grow 4.9% in 2021, up from an average growth rate of 1.2% from 2011 to 2019. pointed out that
“The FAO report confirms that we are safeguarding the long-term sustainability of Ontario’s frontline public services for years to come. By enhancing critical frontline services such as education, infrastructure and more, we can make a significant investment in building Ontario,” Allen said in a statement.
FAO’s Wertmann said states will need to hire an additional 138,669 employees in the private sector, long-term care, home care and child care sectors to implement the planned programme. hospital.
With wage growth well below inflation, states may need to raise wages further to attract workers, he said. Wage growth projections that take inflation into account could cost an additional $6.8 billion over the next five years.
“If you’re not filling a position, you’re not delivering the level of service you intended or promised,” he said.
In total, governments spent $48.2 billion on wages in 2021-2022, while FAO expects it to reach $56.9 billion by 2026-2027.