Skip to main content

Deani Neven Van Pelt is director of the Barbara Mitchell Centre for Improvement in Education at the Fraser Institute. Ben Eisen is a senior policy analyst at the Fraser Institute.

Over the past decade, Ontario government spending on public education has grown at an unsustainable rate, driven largely by significant growth in employee compensation costs. To help fight the province's daunting budget deficit, the government must hold the line on teacher compensation.

In its recent contract negotiations with teachers' unions, the government required "net zero" terms. In other words, money for any raises would have to be found within existing funding envelopes.

This week, it was revealed that the government had made $2.5-million in payments to three different unions to cover their expenses during the current round of collective bargaining under the new framework.

Some have cited this development to criticize the negotiation framework – New Democratic Leader Andrea Horwath, for example, called the new framework, with the net-zero rule and centralized negotiation on salary issues, "a failure." Catholic teachers' union president Ann Hawkins defended the payouts as necessary under the new framework, which the unions claim is more complex.

The payments are unseemly – in principle, taxpayers should not be made to pay for both sides of the collective-bargaining process. But these developments should not cause us to lose sight of the fact that a net-zero approach to salary negotiations is justifiable and necessary.

A quick look at the numbers demonstrates why it's important for the government to hold the line on compensation.

Statistics Canada data show that between 2003-04 and 2012-13 (the last year of available data) annual education spending increased by 50 per cent in Ontario, despite a shrinking school-age population. Per-student spending reached $12,299, up 57 per cent from a decade earlier.

This run-up was driven primarily by an increase in compensation costs for public school employees. Total spending on salaries and wages in Ontario's schools increased by 50.6 per cent over that period, while spending on pensions increased by 103.8 per cent. Only two provinces, Alberta and Saskatchewan, experienced a larger increase.

The rapid rise in education costs is a significant source of fiscal pressure on Ontario's finances. Consider this: If Ontario had increased education spending over the same time period, but only at the rate necessary to account for inflation and changes in enrolment, it would have saved $6.1-billion in 2012-13 alone – enough to reduce the provincial budget deficit by two-thirds that year. Similar restraint over time would result in a substantially reduced debt burden and more money available for other priorities.

In this context, the net-zero approach was the right course.

Of course, the government's execution of the framework has been far from perfect. The decision to reimburse the unions for negotiation expenses is not reasonable to taxpayers. Further, the recent decision to fund a 1.5-per-cent salary increase, and a 1-per-cent lump sum payment to Ontario high school teachers, by reducing planned funding for programs that help students at risk of not graduating might not be a wise use of money. The government deserves scrutiny and possibly criticism for this, but it shouldn't cause us to lose sight of the basic fact that a net-zero negotiation structure is needed for this round of contract negotiations, and possibly future rounds.

A popular but false narrative holds that schools are underfunded and education spending had been cut in Ontario and across Canada in recent years. The reality is that education spending in Ontario has increased rapidly, with the costs largely driven by increases in employee compensation. Despite problems in the execution of the framework, the net-zero approach to contract negotiations is a necessary step to help halt these unsustainable trends.