Wage freezes, outsourcing and arbitration reform

By MPP Toby Barrett
“We can’t manage the deficit without addressing what is the single biggest line in our budget – public sector compensation” – Finance Minister Dwight Duncan

December through February has traditionally meant pre-budget public hearings across the province for me over the past eight years as a member of Ontario’s Finance Committee. However, this exercise in public participation has come to an end under the present McGuinty minority government.

In the vacuum left by the currently defunct pre-budget process, Ontario’s Opposition has presented ideas and called for action to help kick-start the economy – ideas including a public sector wage freeze, outsourcing, and arbitration reform.

With 55 per cent of all government program expenses going to wages, something’s got to give – and soon. A fair, effective and legislated public sector salary freeze – in contrast to Mr. McGuinty’s unenforceable “volunteer” wage freeze – is an important first step. For example, British Columbia, New Brunswick, Manitoba and the UK have initiated wage freeze procedures in light of the fragile economy.

Consideration must also be given to outsourcing and introducing competition for the delivery of government services. A number of services are best delivered by government, but there are savings and quality improvements possible by opening other areas to competition from the not-for-profit and private sectors.
That said, while outsourcing is an option with so many services, public consultation as well as government oversight is required to supervise the competitive process and set and enforce standards. The contracting out of service delivery must be properly managed, inspected and audited.

Our calls for wage freeze and outsourcing are accompanied by further appeals for reform to the underlying arbitration system that results in unrealistic settlements in the first place.

While the Ontario government has created record deficits and run our economy into the ditch, it has tolerated unsustainable collective agreements and unaffordable benchmarks for arbitration with public sector unions.  While there’s no doubt government should be paying public servants what is fair, consideration must also be given to what this province, and what its families, can afford.
The arbitration system needs to be fixed: arbitrators’ decisions must explicitly reflect local economic conditions, and more transparency and accountability is required. Clear and tight timeframes are necessary, and written decisions required to clearly explain the reasoning for awards.

While the Ontario government awaits – with some trepidation – the arrival of its own Drummond report, we in Opposition have spent the first 100-plus days of the McGuinty minority calling for action to stem the damage of eight years of free spending and debt doubling. Having amassed a $16-billion deficit, and overseeing unprecedented job loss – 560,000 people are out of work – while failing to lift a finger the first four months of his new government, Mr. McGuinty is quite clearly out of gas and in need of new ideas.

In fact, the Premier himself admitted, he “couldn’t agree more with” a Conference Board of Canada report last week suggesting, “if we don’t do things in a different way, we’re not going to be able to balance our budget in 2017-18”.

As we head to a budget from a government clearly out of ideas, we in Opposition suggest a few of our own – wage freeze, outsourcing, and arbitration reform.