ontario news watch

Duelling ideological media headlines greeted the September 28 release of a report on Ontario public sector employment from the provincial legislature’s Financial Accountability Office.

According to the (somewhat lefty) CBC News: “Ontario needs more public sector workers and might have to raise wages to attract them: FAO.”

According to the (more right-wing) Globe and Mail: “Ontario wage cap bill could save province $9.7-billion, new report shows.”

The province’s only seven-year-old Financial Accountability Office itself has somewhat lefty origins. It was first proposed by NDP leader Andrea Horwath in 2013, as the Liberal minority government Kathleen Wynne inherited from Dalton McGuinty was looking for budget support.

A first Financial Accountability Officer started work in March 2015. The current Officer Peter Weltman (a graduate of the Parliamentary Budget Office in Ottawa) was appointed in May 2018. He has some staff: 18 + Mr. Weltman make up “Our Team” on the FAO website today.

Not exactly accidentally, the report released on September 28, 2022 — “Ontario Public Sector Employment and Compensation : Historical Trends, Projections and Risks” — bumps into contract talks between unions and the provincial government, and a court challenge to the province’s Bill 124 of 2019, which legislated a 1% public sector compensation cap.

For its main part the document offers a current snapshot of a significant chunk of the economy in Canada’s most populous province.

All told the FAO’s “public sector” includes 24.6% of “Total Paid Workers in Ontario in 2021.” The remaining 75.4% are still in the “private sector.”

One-quarter of the work force is no small amount. But this Ontario public sector of 24.6%, includes 3.6% of total paid workers in “Municipal Government” and 2.5% in “Federal Government (in Ontario).” Even the remaining 18.5% of paid workers in the “Ontario Broader Public Sector” are further subdivided.

At the core is 10.3% of total paid workers in the “Ontario Public Sector.”  This group is “financially controlled by the Province.” It is further subdivided into School Boards (4.5%), Hospitals (3.7%), Ontario Ministries and Agencies (1.4%), and Colleges (0.7%).

The Ontario Broader Public Sector includes another 8.2% of paid workers in “Other Provincially Supported Organizations.” They “receive significant funding from the Ontario government but are not considered to be financially controlled by the Province.”

Logically enough, the FAO report concentrates on the Ontario Public Sector that employs 10.3% of the province’s work force and is “financially controlled” by Queen’s Park.

The report ponders the historical data on this sector,  and comes up with a base-case scenario of near-term growth. On this scenario “the FAO costed the impact of Bill 124 and estimated that it will save the Province a cumulative total of $9.7 billion in salaries and wages costs … through to 2026-27.”

At the same time, the report notes three “risks” to this base-case scenario : (1) “Inflation Could Lead to Higher Wage Increases”; (2) “Successful Court Challenge to Bill 124 Could Lead to Higher Spending on Salaries and Wages”; and (3) “Staffing Shortages Could Lead to Reduced Service Levels and Higher Wage Increases.”

It could be argued that the still somewhat murky character of the second Ford Nation government elected this past June 2 will be revealed as it navigates these risks over the near future ahead.

The government that launched Bill 124 in 2019 was open to the criticism that conservative parties in our time, deeply rooted in private sector interests, can never operate effective public sectors, because they are ideologically averse to the paid workers who earn their living this way.

(It could also be said that the only good public services, on this view, are cheap public services.)

On the other hand, the 2022 FAO report on “Ontario Public Sector Employment and Compensation” does lend some support to the case for “moderation” in Ontario public sector pay. The 2021 average annual salary of paid workers in the Ontario private sector, for example, was not much more than $59,000. For the 10.3% Ontario public sector it was somewhat more than $69,000!

(The Other Provincially Supported Organizations in the broader public sector, on the other hand again, are another story — with average annual salary at less than $51,000 in 2021.)

Meanwhile, back at Queen’s Park key current headlines suggest various straws in the wind: “Ontario just increased its minimum wage by 50 cents”; “Big salary increases expected for many Toronto workers next year”; “Ontario CUPE education workers vote 96.5% in favour of strike mandate.”

Whatever else, the latest report of the legislature’s Financial Accountability Office of Ontario does shed some light on the deeper background to all these kinds of  headlines — right, left, and centre.

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