THUNDER BAY: It’s time to stand up for taxpayers by fixing a broken arbitration system that awards unaffordable contract settlements to government unions – a trend fuelled by nine years of the provincial government throwing money at its former union allies, PC Leader Tim Hudak said today.

Hudak made the comments following a meeting with officials from the Northwestern Ontario Municipal Association and Thunder Bay Mayor Keith Hobbs, where he discussed his party’s Ability to Pay Act to help deliver much needed relief to municipalities facing tight-budget constraints.

“We must start with a freeze on new government spending and a mandatory, across-the-board government employee pay freeze for two years,” Hudak said. “But what comes after? Without bold reforms to the things that drive wages and benefits to these heights in the first place – such as the way arbitrators arrive at settlements – we’ll be right back where we started from.”

With a million employees, salary and benefit costs in Ontario have gone up 46 percent, costing taxpayers $60 billion, Hudak noted. “While the economy is barely growing because of this government’s managerial incompetence, unaffordable contract settlements are still being handed out on the government’s watch – and at the expense of taxpayers and small business owners.

“The government knows some councils have been forced to raise property taxes, impose user fees or cut services to pay for these contracts,” Hudak said. As evidence, between 1998 and 2011, Thunder Bay saw its industrial tax base shrink by almost 40 percent. Despite this, in 2011, an arbitrator handed out seven years’ worth of retroactive wages ranging as high as 6 per cent annually for fire fighters.

The Ability to Pay Act addresses the ongoing concerns of local officials who have repeatedly called on the province to reform the arbitration system. The legislation is gaining momentum across Ontario, including a major endorsement by Mississauga Mayor Hazel McCallion and the city’s council. Hudak added that the legislation is an important step to get our fiscal house in order and ensure scarce tax dollars go to things that create jobs like thriving cities, reliable roads and tax relief. The legislation has three key goals:

• First, arbitrators’ must remember that taxpayers do not have bottomless pockets. They have to consider economic realities including the local tax base and unemployment rate, when making decisions, and explain those decisions in writing;
• Second, establish a panel of independent arbitrators to decide cases within three months;
• Third, dedicate an Ability to Pay Division that would publish comparative information on salaries and benefits, as well as all arbitration decisions.

Hudak concluded that “the Ability to Pay Act is about standing up for taxpayers and rebuilding economic prosperity to create jobs. It’s just one of the many ideas the PC team has put on the table to balance budgets and foster job creating communities,” Hudak concluded.