Hospital, university and electricity utility executives in Ontario are bracing for a pay freeze covering all aspects of their compensation, including bonus pay, in Tuesday’s provincial budget.
Finance Minister Dwight Duncan signalled at a pre-budget photo-op on Monday that he is looking at extending a two-year freeze introduced in 2010 for all public-sector workers in the province who do not bargain collectively. He suggested that the freeze will be broader this time around, covering not just salaries but also bonuses and other incentive pay for CEOs and other executives.
“There will be a robust narrative on executive compensation in the budget,” Mr. Duncan told reporters in his office in the Frost Building.
Last Friday, the government drew attention to the pay packets of top executives by releasing the annual list of public sector workers who earned more than $100,000 ahead of the budget and even before the March 31 fiscal year end. And earlier this month, the government announced that it is freezing the salaries of MPPs for another two years to help set the tone for contract talks with the province’s doctors and teachers.
Ontario Power Generation complied with the wage freeze legislation introduced in the budget two years ago by paying chief executive officer Tom Mitchell a salary of $800,000 in 2011 – the same amount he received in each of 2010 and 2009. But Mr. Mitchell also received incentive pay of $1-million in 2011, bringing his total compensation to $1.8-million, $500,000 higher than in 2010.
Clifford Nordal, who recently retired as chief executive officer of London, Ont.-based St. Joseph’s Health Care, saw his total compensation double in 2011 to $1.4-million, largely because of retirement incentives.
Premier Dalton McGuinty, under fire in Question Period on Monday over the generous pay packets for many public sector executives, told opposition members to “stay tuned” for measures in the budget that will “specifically address” those issues.
Compensation and pension costs in the broader public service consume 55 cents of every dollar the government spends on programs. The province needs to rein in spending to help erase its deficit, forecast to reach $16-billion this year.
Mr. Duncan reiterated on Monday his pledge to eliminate the deficit by fiscal 2018 while protecting investments the McGuinty government has made in health care and education.
Mr. McGuinty said in Question Period that the budget will include “modest” spending increases in high-priority areas, including health care, education and social services.
“Other areas will either be flat-lined or see reduced spending levels,” Mr. McGuinty said.
Mr. Duncan described his sixth budget as a “uniquely Liberal” document, one that protects the government’s all-day kindergarten program and keeps class-sizes small.
Mr. Duncan said he consulted widely with former federal and provincial premiers and finance ministers of all political stripes before he crafted his budget. “I even spoke to Jim Flaherty,” he said, referring to his federal counterpart.
The two ministers have an on-again, off-again relationship. Relations are becoming increasingly strained in recent weeks as both the federal government and the province tackle deficits.Report Typo/Error