Ontario colleges have been told their plans for raising salaries for presidents and other senior staff are "unacceptable," and the provincial government expects them to revise the proposals before the schools can implement any pay hikes for non-union staff.
For the past month, colleges consulted on new "salary frameworks" that would replace a provincial wage freeze. If presidents were to receive the maximums outlined in the plans, many would receive pay hikes of 20 per cent to 40 per cent, with some looking at raises of $100,000 annually.
On Thursday, however, the government tried to prevent such eye-popping paydays.
"This has to be reasonable. … You have to explain to people why you're paying what you're paying," Deb Matthews, Minister of Advanced Education and Skills Development, told reporters.
The colleges are the first sector to make public their frameworks in response to new government legislation that lifts a wage freeze on non-union staff that was imposed in 2012. Hospitals, universities, school boards and other public-sector firms have to approve similar plans by September, 2017. Steep hikes could lead to rocketing salaries in these other sectors and public backlash.
"The colleges are the first out in this process, others are watching with interest," Ms. Matthews said.
Schools polled by The Globe and Mail said their governing boards would discuss the minister's remarks but that it was too soon to tell how the salary ranges may be revised.
"We will do all we can to meet the expectations of government as they've been set out today," said Brian Stock, director of communications for George Brown College.
It is not clear how or if the government can force colleges to scale down their proposals on pay. In the current legislation, once a new pay structure has been approved through a company's governing board, it replaces the wage freeze.
"There are tools that I can use, but today, we are asking them to go back and rethink their comparators," Ms. Matthews said.
At issue in the current dispute between the government and the colleges is whether the schools chose the right companies against which to compare the salaries they offer.
Most colleges came up with the new salaries by looking at pay at other colleges, universities and hospitals. Five colleges also considered pay at big companies in the public sector including MaRS, Toronto Pearson International Airport and the LCBO.
"Quite frankly, having several of the colleges choose comparators 10 times their own size is not in the spirit of the legislation," Ms. Matthews said.
Administrators in the college sector are doing complex and challenging jobs and the schools must be able to offer competitive salaries, the colleges said in their initial salary proposals. The pay scales were researched by Mercer, a human-resources consulting firm, sources said.
At the same time, if executives were to receive pay bumps, they would be moderate, colleges said.
"Our board would not be putting the president or vice-president at the top of the range, they would fall in the middle," said Jay Robb, director of communications at Mohawk College.
While the dispute over pay has focused public attention on the college sector, a report from PriceWaterhouseCoopers that was obtained by The Globe this week showed that the college sector is facing a $1.9-billion deficit in eight years unless the schools cut staff, raise tuition and receive more government funding.
Proposals for high salaries are "discordant" with those budget pressures, Ms. Matthews said.