(TORONTO, July 25, 2018) – Today, Peter Weltman, Financial Accountability Officer of Ontario (FAO), released a commentary entitled Assessing Ontario Government Employment and Wage Expense.
Employee wages and salaries are a major expense category for the Ontario government. Based on FAO estimates, the Ontario government will spend approximately $41.4 billion on salaries and wages of approximately 650,000 people in 2018.
Restraining the growth in employee compensation was a key element in the previous government’s plan to eliminate the deficit and was achieved by limiting increases in both public-sector wages and employment. As a result, the total wage and salary expense of the Ontario government increased by an average of 2.2 per cent per year from 2010 to 2016, down sharply from increases averaging 6.7 per cent over the 2001 to 2009 period.
However, the growth in the Ontario government’s total compensation expense has increased noticeably over the past two years. The FAO estimates that the Ontario government wage bill will increase at an average pace of over 4.4 per cent in 2017 and 2018, driven by sharp increases in both wage and employment growth.
Moving forward, a variety of factors will make restraining the pace of government wage growth more challenging. Recent collective bargaining agreements in the Ontario public sector have provided for higher wage rates for public sector workers. In addition, Ontario’s increasingly competitive labour market is contributing to more unfilled public-sector positions, particularly in hospitals. To fill these vacant positions, government employers may be under further pressure to boost wages to compete for workers.
About the FAO
Under the Financial Accountability Officer Act, 2013, the Officer provides independent analysis on the state of the Province's finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario. Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.