Ontario Owes $6 Billion To Public Sectors Workers In Bill 124 Compensation

Ontario is in a financial bind, owing over $6 Billion to public sector workers following a court ruling that declared the government’s salary cap legislation unconstitutional. Bill 124 capped salary increases for broader public sector workers at one per cent a year for three years, but after the Court of Appeal for Ontario ruled it unconstitutional the government repealed it.

It has been observed that after the lower court found the law unconstitutional in 2022, other unions have been seeking an increase in their pay to constitute above one percent a year. The government officials are restricted to speak about the costs while the amount adds up to $6,000,800,000.

The province’s financial accountability officer highlighted in a report earlier this month that compensation in the health and education sectors led the government to spend billions more than it was planned.

The cost of the reopener payments will be confirmed as Finance Minister Peter Bethlenfavy will be introducing next year’s budget in less than two weeks. In the last fiscal update, the minister projected that Ontario would end this year with a $4.5 billion deficit, which is larger than the $1.3 billion he forecasted in last year’s spring budget.

The province has tapped into a significant contingency fund, as noted by the Financial Accountability Office, to help cover some of the rising compensation expenses. As of the third-quarter financial report, $3.3 billion remains in this fund. The FAO warns that the government may end up shelling out over $13 billion to cover pay increases for public sector workers affected by Bill 124.

Since the law was initially deemed unconstitutional by a lower court, various groups of public employees, such as teachers, nurses, hospital workers, public servants, Public Health Ontario employees, ORNGE air ambulance paramedics, and college faculty, have received additional retroactive pay through arbitration.

Navneet Kaur