Legislating 10 days of paid sick leave will raise millions for Ottawa in new tax revenue, PBO says

Legislating 10 days of paid sick leave in federally regulated work forces will bring in $229-million in new tax revenue for Ottawa over four years, Parliamentary Budget Officer Yves Giroux says.

The PBO released a costing note on Tuesday that looks at the fiscal implications of the government’s Bill C-3, which would amend the Canada Labour Code to require 10 days of paid sick leave a year for workers in federally regulated sectors.

While the new law would impose a cost on the government for federal Crown corporations that do not already offer 10 days of paid sick leave, most workers affected by the change will be in the private sector. The private federally regulated sector includes banking, telecommunications and broadcasting, and large segments of the transportation sector.

The PBO report assumes the law would generate new tax revenue when workers in the affected sectors who had been taking unpaid sick days are paid for those days, resulting in higher annual income and year-end tax bills. The PBO said that revenue would more than offset Ottawa’s additional costs at Crown corporations.

Tuesday’s PBO report estimates the change would bring in $68-million in additional federal tax revenue in the 2022-23 fiscal year, $71-million the next year and $74-million the year after. The costing note assumes the bill will be passed quickly and be in effect for the final part of the fiscal year that ends on March 31, bringing in $16-million.

The government introduced C-3 last month as priority legislation. In addition to amending the Canada Labour Code, the bill would also amend the Criminal Code to include provisions related to protecting health care workers. The amendments would add a new intimidation offence that is designed to discourage disruptive protests outside hospitals and other health care facilities.

Every Canadian province should implement 10 days of permanent paid sick leave

Ottawa moves to criminalize intimidation of health care workers; introduces 10 sick days for federally regulated workers

The PBO estimates that about 625,000 federally regulated workers will benefit from the legislation through additional paid sick days. Of that total, about 31,000 work for Crown corporations.

The largest federally regulated private sector is banking, but reaction to the government bill from the Canadian Bankers Association has been muted.

“Canada’s banks already provide their employees with a range of paid leave-related programs that meet, and in some cases exceed, what is required under the Canada Labour Code,” CBA spokesperson Mathieu Labrèche said on Tuesday when asked to comment on the bill and the PBO’s costing note. “Indeed, there are options available for bank employees during this difficult time, and careful consideration is given to their particular personal circumstances.”

The Official Opposition Conservatives have said they are “generally supportive” of Bill C-3, while the NDP has said the Liberals should have legislated 10 days of paid sick leave at the onset of the pandemic.

The House of Common is debating the bill at second reading and it has not yet been put to a vote to send it to committee for study.

For subscribers: Get exclusive political news and analysis by signing up for the Politics Briefing.