Civil servants getting pay hikes of up to 35 per cent

Managers to get $125M in raises after five-year provincial freeze

Just in time for Christmas, 8,500 managers, executives and deputy ministers in Ontario’s civil service are getting $125 million in pay hikes, the Star has learned.

It’s all because a long-standing salary freeze has left some managers earning less than their unionized staff, and mandarins lagging behind higher-paid colleagues in the broader public sector and private business.

The payouts — to come over the next four years — average $14,705 each, although individual amounts will vary as the government tries to stem a brain drain. That money will arrive in pay packets starting in the next two weeks, with 5-per-cent raises retroactive to April, officials said.

Treasury Board President Liz Sandals will announce the plan Wednesday on behalf of the Liberal government, which has been criticized for not doing enough to help consumers struggling with skyrocketing hydro bills. “We need the ability to attract highly skilled and talented people into public life,” Sandals said in a statement obtained by the Star.

Almost 25% of managers in the public service make the same as or less than their unionized staff — prompting many to ask for demotions

Managers and staff excluded from unionized jobs will get raises of 10 per cent; about 900 executives will qualify for 20-per-cent hikes; and a much smaller number of deputy ministers will enjoy raises of up to 35 per cent.

Pay grid and salary freezes for nonunion staff since 2009 have knocked the compensation system off-kilter, with almost 25 per cent of managers in the Ontario public service making the same as or less than their staff, officials said.

That has prompted 1,500 to ask for demotions to unionized jobs with better pay — an increase of 200 from a year ago.

“Due to this freeze, the OPS (Ontario public service) has faced retention and recruitment challenges,” Sandals added.

“Salaries are no longer competitive and, in some cases, are 59 per cent behind comparable positions in the broader public sector and other jurisdictions.”

Annual pay rates for civil servants range from $100,000 or less for managers to $300,000 or more for some of the highest-paid deputy ministers.

Improved salaries were recommended in a 50-page report of an expert panel headed by former TD Bank chief economist Don Drummond, who called for raises to be phased in over a three-year period.

“There could be some public backlash,” warned Drummond, who led the 2012 Commission on Reform of Ontario’s Public Services.

It made 400 recommendations to improve the affordability of government services and warned against the perils of pay freezes.

“Instead, the government has frozen salaries since 2011 and suspended merit pay . . .

“But it must be kept in mind that creating the right conditions for management to be effective is critical for achieving government and public objectives.”

Drummond called for a return to merit pay, but advised the government to dole it out judiciously.

“It should give substantial awards to the minority who go beyond their job requirements as opposed to the previous system that gave modest bonuses to almost everyone,” he said in the report.

Sandals insisted the government can fulfil its promise to eliminate annual deficits by 2018 despite the extra payouts, which officials said are offset by other savings within government.

“Our government has a plan to make everyday life easier for Ontarians, all while balancing the budget,” she said in the statement.

Last December, the government announced raises of $58 million for 8,400 managers and other non-unionized civil servants to make up for pay freezes that took hold in 2011.

That money was intended as a down payment until the new plan could be developed.

One in five managers is set to retire in the next few years, raising concerns about the ability to find replacements with the talent to take on leadership roles.

There are 63,000 workers in the Ontario public service.