Ability to Pay Act Answers Mayors' Call for Arbitration Tied to Local Economic Conditions
20 September 2012
“I refuse to increase taxes to pay for decisions that are made by arbitrators…There will be no money. That means we go back into our operations and we cut and we cut and we cut.”
- Windsor Mayor Eddie Francis, The Globe and Mail, August 23, 2012
QUEEN’S PARK – Core public services for Ontarians are at risk until Premier McGuinty realizes we can’t reduce the size and cost of government without addressing its single biggest expense: employee compensation. If the current government is serious about fixing Ontario’s broken arbitration system, it will support the PCs’ Ability to Pay Act, Ontario PC Municipal Affairs & Housing Critic Steve Clark said today.
“Mayors from across Ontario have told me the province’s arbitration system gives them little control over their budgets, because not only do arbitration decisions continually award unsustainable salary increases, they can take years to be settled in the first place,” Clark stated. “McGuinty has failed to take action. As a result, mayors are forced to either gouge taxpayers for more money or cut important public services.”
The Ontario PCs, mayors and economist Don Drummond have all said the key to reining in ballooning compensation costs is to tie arbitration decisions to local economic conditions, Clark continued. “For most Ontarians, their salaries are already tied to economic reality. They’ve made significant sacrifices over the last few years, and certainly haven’t received 10 per cent pay increases. The Ability to Pay Act ensures government workers are no longer an exception to this rule, which is why mayors are stepping up and supporting our PC bill.”
“Like many others, Owen Sound Mayor Deb Haswell has said she’s hoping this legislation passes so that future awards might be easier for taxpayers to swallow,” Clark said. Late last year an arbitrator retroactively awarded Owen Sound firefighters a total wage hike of 10 per cent for the period from 2009 to 2011, costing the municipality $500,000.
Many communities have been forced to cover large retroactive settlements such as Thunder Bay, which saw its industrial tax base shrink by 39 per cent between 1998 and 2011, yet in 2011 had to pay seven years’ worth of retroactive annual wage hikes ranging from 3.25 to 5.83 per cent.
The Ability to Pay Act addresses these issues by requiring arbitrators to consider local economic factors like the state of the tax base and unemployment rate, and explain in writing how these criteria factored into a decision. It would set up a panel of independent arbitrators to decide cases within three months. The Act would also publish data on things like comparable wages in the broader economy so taxpayers could see how their salaries stacked up to those on the government payroll.
“After nine years of ignoring the pleas for help from mayors, it’s time McGuinty stood up for taxpayers by supporting the PCs’ Ability to Pay Act.”