Ontario’s new premier Doug Ford and his Progressive Conservatives have put the brakes on government spending only hours after taking office, freezing the pay of managers in the Ontario public service and putting new restrictions on the use of a pharmacare program known as OHIP-plus.
Facing the daunting challenge of slashing a number of taxes while also balancing the province’s books over the next four years, the Tory premier has promised to find $6-billion of efficiencies in government spending without cutting any jobs. One of his first moves after being sworn in was to stop pay hikes planned for Canada Day.
At around 6 p.m. on Friday, after most public servants had already gone home for the long weekend, an internal memo was sent to managers of the public service warning that salary adjustments planned for July 1 were suspended indefinitely for executives, management and employees not covered by collective bargaining.
“I am writing to inform you of a general suspension of pending compensation adjustments until the new government can put in place an expenditure management strategy,” wrote Steve Orsini, the head of Ontario’s public service.
The former Liberal government had kept a salary freeze on managers and executives in the public service for five years, only ending the freeze in 2017 when the province’s books were close to being balanced. Mr. Orsini said on Friday that the new pay freeze was “until further notice” and also included a stop to any pay adjustments for employees with compensation linked to union contract increases.
Friday’s wage freeze came after the incoming government put a halt to hiring in the public service and stopped all discretionary spending on June 18. Critics have warned that the move will lead to longer waits for services as employees go on leave or retire and aren’t replaced.
A plan by former Liberal Premier Kathleen Wynne to hire 175 new labour inspectors to look into workplace issues is one government program hit by the hiring freeze. Only 75 of the new inspectors were hired before the freeze was put in place, according to the Ministry of Labour.
Essential front-line services, which includes correctional workers, along with police and firefighters employed by the provincial government, are exempt from the hiring freeze on the 60,000-member public service.
The new spending limits are expected to remain in place until after Mr. Ford delivers on a campaign promise to complete an exhaustive, line-by-line audit of all government spending. Minutes after his swearing-in on Friday, Finance Minister Vic Fedeli said he expects that audit to start immediately.
“We will go line by line through the government books and find savings for taxpayers. One of Doug Ford’s first orders of business after winning the election was to institute a hiring freeze until we can get a true state of Ontario’s finances,” PC spokesman Simon Jefferies said in a statement on Friday evening in response to the new pay freeze.
In a further move to reduce government spending, Health Minister Christine Elliott announced on Saturday afternoon that the OHIP-plus pharmacare program created by Ms. Wynne’s Liberals would now be more limited.
The plan will now only provide free drugs to Ontarians aged 24 and under who don’t have access to prescription drug benefits. The program was previously open to all people in that age range, regardless of benefits.
Children and youth who are not covered by private plans will still receive prescriptions for free, according to a statement from Ms. Elliott’s office. Those with private insurance will need to use that first and the government will cover the difference. The Tories say the move will save the government money by requiring drug plans, either from workplaces or schools, to pay the bulk of costs of the 4,400 products covered by OHIP-plus.
The new government’s decision to limit OHIP-plus is a worrying sign of its views on universal access to health care, said Nathalie Mehra, the executive director of the Ontario Health Coalition.
“Ford was sworn in yesterday and his first act in health care was to break with the principal of universality and cut a service that was being used. The move away from a universal approach saves the government some money, but it doesn’t save money overall, someone still has to pay for it,” she said.