: 2010 Ontario Budget: FAQ:
Public Sector Compensation Restraint To Protect Public Services Act, 2010

Public Sector Compensation Restraint

Ontario has felt the effects of the global recession and is running a deficit in order to create jobs and protect our public services.

Ontarians value and appreciate the contributions of those who deliver their public services. They also expect those who are paid by tax dollars to do their part to help sustain public services.

The McGuinty government is managing responsibly by controlling costs in one of its largest spending lines – compensation of public sector employees.

Everyone who is paid through taxpayer dollars is being asked to do their part.

MPPs will lead by example with a three-year salary freeze.

The government has passed legislation that will freeze the compensation structures of non-bargaining political and Legislative Assembly staff for two years.

It will also freeze compensation plans for all non-bargaining employees in the broader public sector, including the Ontario Public Service, for two years. This will help redirect up to $750 million toward sustaining schools, hospitals and other public services.

For employees who bargain collectively, the government will respect all current collective agreements. When these agreements expire and new contracts are negotiated, the government will work with transfer payment partners and bargaining agents to seek agreements of at least two years’ duration that do not include net compensation increases.

The fiscal plan provides no funding for compensation increases for future collective agreements.
It doesn’t matter whether contracts expire next month, next year or the year after that – all employers and employee groups will be expected to do their part.

This is a balanced and responsible plan that requires employers and employee groups in the public sector to work together and do their part to sustain public services.

Q. Who is covered by the legislation?

A.The Act covers all public sector employers who have employees that do not collectively bargain compensation.

Excluded from the legislation are municipalities and local boards of municipalities and other employers that receive less than $1 million funding from the province,.


Q. Which employees will be affected by this legislation?

A. MPPs, non-bargaining political staff and non-bargaining employees across the broader public sector and the Ontario Public Service will be required under this legislation to contribute to public sector compensation restraint. 

Non-bargaining employees in the Ontario Public Service, hospitals, boards of health, schools, colleges, universities, Hydro One, Ontario Power Generation, and many other provincial agencies, boards and commissions will be prohibited from compensation increases before the beginning of April 2012, except in specified circumstances.

Q. Why only non-bargaining employees of public sector employers, and not those who bargain collectively (e.g., unionized)?

A. All broader public sector employees are being asked to contribute to protect public services during these challenging times.  It is only the fair thing to do. 

For non-bargaining employees, the restraint legislation prohibits increases to rates of pay, pay ranges, benefits, perquisites or other payments for two years, until April 2012. Employees who are part of a union or who bargain compensation collectively would see their current agreements honoured.  When these agreements expire and new contracts are negotiated, the government will work with transfer payment partners and bargaining agents to seek agreements of at least two years’ duration that do not include net compensation increases.

The fiscal plan provides no funding for compensation increases for future collective agreements. 

It doesn’t matter whether contracts expire next month, next year or the year after that – all employers and employee groups will be expected to do their part.

Q. When does the legislation come into effect?

A. The Act is in effect as of March 25, 2010.   

Read Schedule 24 Public Sector Compensation Restraint to Protect Public Services Act, 2010 of Bill 16 An Act to implement 2010 Budget measures and to enact or amend various Acts.

Q. What does the restraint do?

A.The Act prohibits increases to compensation, including rates or pay, pay ranges, benefits, perquisites and other payments before the beginning of April 2012, except in specified circumstances.

Q. How long does the restraint last for?

A. The Act covers the time period up to and including March 31, 2012.

Q. What is included in the definition of a compensation plan?

A. A compensation plan consists of all aspects of an employee’s compensation including base pay, merit pay, time off such as vacation, pension, health and other benefits. Freezing a compensation plan and all of its components means, in short, there will be no across-the-board increases and salary ranges are limited to existing levels.

Q. Are you freezing compensation?

A. The legislation prohibits increases to rates of pay, pay ranges, benefits, perquisites and other payments that were in effect on March 24, 2010 before the beginning of April 2012, except in specified circumstances.

Under the legislation, there are certain conditions specified which will allow for salary increases for employees, within an existing pay range, providing these were part of an organization’s compensation plan as it existed on March 24th 2010. These conditions include:

  • the employee’s length of time in employment or office
  • assessment of performance
  • the employee’s successful completion of a program or course of professional or technical education.

Q. Who can tell me if I am covered by this legislation?

A. If it is unclear if the legislation applies to you, contact your employer.

If either you or your employer is uncertain if your organization is a recognized bargaining group, you or your employer can seek direction from the Public Sector Compensation Restraint Board.  This board will have the authority to determine whether employers or employees are covered by the legislation.

Q. Is there going to be legislation which covers employees who collectively bargain compensation (e.g., unionized)?

A. All public sector employees are being asked to contribute to protecting public services during these challenging times.  It is only the fair thing to do. 

Non-bargaining employees will see a prohibition on increases to rates of pay, pay ranges, benefits, perquisites or other payments for two years.

Employees who are part of a union or who bargain compensation collectively would see their current agreements honoured.  When these agreements expire and new contracts are negotiated, the government will work with transfer payment partners and bargaining agents to seek agreements of at least two years’ duration that do not include net compensation increases.

The fiscal plan provides no funding for compensation increases for future collective agreements.

It doesn’t matter whether contracts expire next month, next year or the year after that – all employers and employee groups will be expected to do their part.