Memo to Ford: Public sector wages are not the problem

It’s entirely possible that the Doug Ford government is about to bring in legislation to cap wages in the Ontario public sector.

Treasury Board Chair Peter Bethlenfalvy first raised the idea back in April, when he called on public employees to accept wage settlements that were “modest, reasonable, and, most importantly, sustainable.”

Details of the possible legislation, which could come in the next two weeks, are not yet public.

Will the new law infringe on collective bargaining rights protected under the Canadian Charter of Rights and Freedoms? Maybe.

Would our Premier change course if it did? Unlikely.

Is this a fair way to raise money for public services or to reduce the provincial budget deficit? Absolutely not.

To begin with, the current $10.3 billion deficit was not caused by program spending. According to the Financial Accountability Office (FAO), Ontario has the lowest program spending per capita of any Canadian province – and not by a little. In 2017, Ontario spent $2,033 a year less per person than the average in the rest of the country.

Getting to average may sound like an impossible dream in the today’s political context, but it can happen. All we have to do is address our real fiscal problem.

The real problem is revenue. As the FAO reports, in 2017, Ontario received less in revenue, per person, than any other province–$1,958 less than the average in the rest of the country.

There’s your trouble. Ontario has well over 14 million people now; if our revenue per capita matched that of our sister provinces, provincial coffers here would have around $28 billion more to spend every year. We’d be investing more in health care, education, fighting climate change–you name it. We could also pay down the deficit.  

Our revenue problems have been around a while, and we won’t fix them overnight. But we can take concrete steps now to start rebuilding Ontario’s fiscal capacity.

In their April 5 paper, Ontario Has Options, my CCPA Ontario colleagues Sheila Block and Ricardo Tranjan laid out a number of ways to raise upwards of $8 billion a year through individual and corporate tax increases. The options they proposed were, to borrow a phrase, “modest, reasonable, and most importantly, sustainable.”

Raising revenues can be done, and it should be done. Tackling our fiscal problems from the revenue side gives all Ontarians a stake in paying for the public services we all depend on. What it does not do is single out one group to pay more because of where they work.

Back in the 1990s, Canadian political economist Leo Panitch used the term “ideological excommunication” to describe how governments treat public employees whenever they need to raise cash in a hurry. Today, Premier Doug Ford might summarize Panitch’s concept as follows: “When I said I was ‘for the people,’ I didn’t mean you.”

This is wrong. Public employees are “the people,” too. They go to work, raise their kids, and volunteer in the community just like private sector workers. By targeting public employees for pay cuts, the government makes the school secretary pay extra for the services we all need while corporate executives (like Peter Bethlenfalvy’s former colleagues) do not.

It could hardly be more unfair.

Here’s a better approach that is fair to everyone: don’t attack public sector wages. Don’t mess with collective bargaining. Do get serious about raising revenues.


Randy Robinson is the Director of the Canadian Centre for Policy Alternatives Ontario office. Follow him on Twitter at @randyfrobinson.

 

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