Ontario saving nearly $10B through wage-restraint law

TORONTO — Ontario's financial watchdog says the government will save nearly $10 billion through its wage restraint law, though factors such as inflation could lower that figure.

A report today from the Financial Accountability Office says it predicts that Bill 124, which capped public sector salary increases at one per cent a year for three years, will reduce the province's spending on salaries and wages by $9.7 billion over the life of the legislation.

The FAO says about 70 per cent of public sector employees have already seen the effects of the three-year wage restraint, but the remaining workers – including some hospital, college and government employees – have not yet started their three-year period.

However, the report says inflation could lead to an additional $6.8 billion in provincial spending on Ontario public sector employee salaries and wages through to 2026-27.

It also says that if a current court challenge to Bill 124 is successful, it could lead to $8.4 billion in additional costs over the next several years, including $2.1 billion in retroactive payments this year.

The report also says the government might need to further increase wages in order to address staffing shortages in areas such as long-term care, home care and child care.

This report by The Canadian Press was first published Sept. 28, 2022.

The Canadian Press