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Bill 124 in Ontario: compensation of at least $6 billion

Natasha Kumar By Natasha Kumar Mar15,2024

Bill 124 in Ontario: compensation of at least 6% billion $

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The Preserving the Viability of the Public Sector for Future Generations Act of 2019, commonly known as Bill 124, capped annual salary increases for public employees at 1% for a period of three years.

The Canadian Press

The Ontario government is on track to have to pay out more than $6 billion to public sector workers as a result of its decision to restrict wages, a move that has been ruled unconstitutional.

Bill 124 capped wage increases for parapublic sector workers at 1% per year for three years, but when the Court Ontario Appeal Court ruled this measure unconstitutional, the government repealed it.

A lower court ruled the law unconstitutional for the first time in 2022. Unions with so-called reopening clauses in their contracts have sought retroactive wage hikes greater than 1% per year and, in most cases, won amounts considerably higher.

Senior government officials, not authorized to speak publicly about the costs, confirm to The Canadian PressThe sums total $6.8 million to date.

The Office of Financial Accountability Ontario (BRF) noted in a report tabled earlier this month that offsets, largely in the health and education sectors, caused the government to spend billions more than planned this year.

Confirmation of the cost of reopening payments comes as Finance Minister Peter Bethlenfalvy prepares to present his government's budget in less than two weeks.

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In the minister's final financial update before the budget last month, the minister predicted that Ontario would end this year with a deficit of $4.5 billion, which is larger than the 1. $3 billion he forecast in last year's spring budget.

Open in full screen mode< p class="StyledImageCaptionLegend-sc-57496c44-2 sbxsP">Premier Doug Ford argued that Bill 124 was intended to restore Ontario's financial health. (File photo)

The province used what the Financial Accountability Office called an unusually large contingency fund to offset part of increasing compensation costs, with $3.3 billion remaining in the fund at the time of the third quarter financial report.

The FAO said wage increases to compensate public sector workers for Bill 124 could cost the government more than $13 billion.

Since the law was found unconstitutional, arbitrators have awarded additional retroactive pay to several groups of public sector employees, including teachers, nurses, other hospital workers, civil servants, Public Health Ontario employees, paramedics and university professors.

LCBO employees are among the most recent to receive back pay. An arbitrator awarded them a 6.5% increase over the three years of their last contract, according to what the Ontario Public Service Employees Union announced this week.

Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my 1-800-268-7116

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