The Ontario PC Party plan to fix the broken public sector salary arbitration system is legislation that will require arbitrators to:

• Make decisions that explicitly reflect local economic conditions, such as the cost of living, and local and provincial budgetary constraints, without the assumed ability to raise taxes to fund settlements.
• Adhere to defined timelines for handing down decisions, enabling local governments to stick to their budget planning schedules amid often rapidly changing economic circumstances.
• Issue written decisions that clearly explain the reasoning for awards, and show that specific factors have been taken into account – such as local, and broader, fiscal conditions.

• The Ontario PC Party would require arbitrators to make decisions that reflect ability to pay without relying on future tax increases.
• As part of the requirement, arbitration decisions would reflect the current economic conditions of the province, region, municipality, or location of the employer at the time the decision is awarded.

• Delays in getting public sector salary arbitration decisions must be ended to let municipal governments keep their finances in line.
• The longer an arbitrator sits on a particular case, the more time there is for local budget pressures to change. For example, unemployment could go up, the tax base could contract or borrowing costs could rise.
• In a recent Thunder Bay case, arbitration took 85 months. Because of the seven-year wait, the decision made a mockery of “ability-to-pay”: Between 1998 and 2011, the City saw a 39 per cent reduction in its tax base.

• Between Budget 2010 and February 2011, 65,700 public-sector workers received wage increases, which the Globe and Mail estimated would cost the treasury over $125 million. (Globe and Mail, February 3, 2011)
• In December 2011, an arbitrator awarded Stratford firefighters and dispatchers salary increases that will cost the city an estimated $1.5 million in a one-time payout. The arbitrator’s decision caused the city to delay approving its 2012 Budget and raised the possibility of a tax increase in order to finance the settlement.
• Thunder Bay firefighters received salary increases that ranged from 3.3 to 5.8 per cent in February 2011 after a seven-year arbitration process. Between 1998 and 2011, Thunder Bay saw a 39 per cent reduction in its industrial tax base.
• Owen Sound’s fire service costs are expected to jump to $4.2 million this year from $3.7 million in 2011, due to higher wage and benefit costs after an arbitrator awarded retroactive pay hikes of 3.6 per cent for 2009, 3.8 per cent for 2010 and 3.6 per cent for 2011.
• In October 2010, an arbitrator awarded University of Toronto professors and librarians 4.5 per cent salary increase over two years.