Public service bosses slapped with salary cap

But many Ontario managers won’t be affected by limit as wages are grandfathered

Finance Minister Dwight Duncan is hitting bosses in Ontario’s vast public service with a new $418,000 salary cap, but many high rollers will dodge his latest wage-freezing austerity effort.

Because the ceiling is grandfathered, hospital CEOs, hydro executives, university presidents, and deputy ministers currently making more than that will be frozen above the maximum.

Fresh from imposing a two-year salary “pause” on elementary and secondary school teachers, the deficit-fighting finance minister took aim at executives and managers at the government, its agencies and the broader public sector in a bid to appease front-line workers facing pay freezes.

Duncan said Thursday that the minority Liberal government will table legislation to limit public sector executives to twice the premier’s $208,974 salary — or $418,000 annually — and scrap bonuses for two years.

In addition, about 8,800 mid-level managers in the provincial public service would see wages frozen for three years and would also see bonuses curbed, saving about $12 million.

“This is symbolic,” admitted Duncan, adding it’s unfair to ask hospital clerks to take pay freezes to help eliminate a $14.8-billion deficit if their bosses are not. “Everybody needs to be seen to be doing their share,” he said, promising pay limits for other public servants will be announced “very shortly.” Union leaders weren’t buying his spin. “If you freeze your salary and you’re making $750,000 a year and you’re not going to get a raise, well golly gosh gee whiz, you’re still making $750,000 a year,” said Warren “Smokey” Thomas, president of the Ontario Public Service Employees Union.

“This is all political doublespeak, this is all a set-up so they can freeze low-paid workers . . . and at the end of the day that’s not going to help the economy of the province,” added Fred Hahn, president of the Canadian Union of Public Employees in Ontario.

The Liberals hope the legislation will pass quickly enough so the next CEO of Hydro One would earn $418,000 — less than half the $954,875 that departing chief executive Laura Formusa earned last year.

“It will work to bring some of the overly generous compensation packages back to re-

“This is symbolic. Everybody needs to be seen to be doing their share.” DWIGHT DUNCAN ONTARIO FINANCE MINISTER

ality,” Duncan told reporters.

The salary lid, modelled on a 2010 proposal from New Democrat Leader Andrea Horwath, affects new hires only.

That means Ontario’s highest-paid mandarin, deputy health minister Saad Rafi, would be red-lined at the salary of $427,551 he earned last year.

Any exceptions to the new policy — for highly specialized jobs at Crown corporations such as Ontario Power Generation — would have to be approved by the finance minister directly.

There were about 150 executives in the civil service and broader public sector who made more than $418,000 last year, mainly in hospital administration.

Any public employer would have to make a “business case” to pay an executive more than the cap, said Duncan.

That is a “loophole you could drive a Mack truck through,” said Horwath. “They could have gone further,” she said, warning that the NDP would wait to see details in the legislation before decide whether to vote for it.

“Let’s not forget who it is that we’re asking to pay these salaries. It’s folks who have lost their jobs, it’s folks who’ve lost their $25-anhour jobs and are now trying to survive on a $15-an-hour job.”

Progressive Conservative MPP Peter Shurman (Thornhill) said it was too soon to say if his party would support the minority Liberals’ legislation, which fails “to recognize that there’s a broad problem.”

“If the economic scenario in Ontario was a beach, what the minister has done is picked a single grain of sand,” said Shurman.