Ontario has frozen the salaries of executives across the public sector as it reviews how raises are granted to top earners at agencies that include school boards, universities and hospitals.
In a directive issued to public-sector agencies this week, Treasury Board President Peter Bethlenfalvy said all base salaries for executives cannot increase beyond their current amounts as the government conducts a compensation review that’s expected to wrap in June next year.
The move affects those who make $100,000 or more at public-sector organizations and has raised concerns from those representing executives at school boards and hospitals.
Bethlenfalvy said the measure is part of the Progressive Conservative government’s plan to “clean up Ontario’s fiscal house.”
“Our commitment to the people of Ontario is that we’ve got to take a hard look at all our expenditures,” he said. “We have to get back on a fiscally responsible track and this is part of that.”
Premier Doug Ford, who took power at the end of June, has pledged to find $6 billion in “efficiencies” for the province. His government has created an independent commission of inquiry and ordered an audit of government books to assess the province’s financial position.
The directive on executive pay comes after the Tories froze wages of managers in government ministries and ordered a review of their compensation earlier this summer.
Cathy Abraham, the president of the Ontario Public School Boards’ Association, said a wage freeze on executive compensation had been in place under the previous Liberal government for eight years and was only recently lifted.
The new freeze could hurt the ability of boards across the province to retain and attract qualified leaders, she said, adding that school board executives oversee complex operations that involve large numbers of students, employees and properties.
“It’s a difficult job,” she said. “We believe if we’re not compensating folks fairly for the work they’re doing we’re going to have a hard time getting people to want to do the job and keeping them in the job.”
The Ontario Hospital Association said executive compensation in that sector has been frozen since 2010. The association said it wants to engage in talks with the government on its compensation review to ensure any framework reached is “responsible and equitable.”
“In addition to the most recent announcement, there have been ten substantive changes to executive compensation in hospitals since 2010,” the OHA statement says. “It is confusing and untenable to continue in this manner.”
Ontario Power Generation, whose executives are also affected, said it was examining the directive from the Treasury Board and would take part in the compensation review.
Don Sinclair, a spokesman for the College Employer Council, said the group which represents Ontario’s colleges is eager to discuss the compensation framework with the government.
“We understand the freeze given the current fiscal climate,” Sinclair said in a statement. “We would welcome a discussion with the government since our colleges have been under a freeze for eight years. Such a long salary freeze does create challenges.”
Bethlenfalvy said the government wants to hear from all stakeholders in the affected sectors and downplayed the freeze’s impact on recruitment and retention.
“I think the types of compensation we’re looking at here is very competitive,” he said. “All we’ve said is we’re putting it on hold. There’s no cutbacks. There’s no cuts being suggested.”