Canada: Progressive Conservatives Introduce Bill 5 - Comprehensive Public Sector Compensation Freeze Act

Last Updated: March 25 2013
Article by Kathryn L. Beck and Karen Sargeant

On February 25, 2013, Progressive Conservative MPP, Peter Shurman (Thornhill), introduced Bill 5 (Comprehensive Public Sector Compensation Freeze Act, 2013).  As the name suggests, the Bill proposes a global freeze in annual compensation across the public sector and much of the broader public sector for a period of two years.  The Bill passed Second Reading on February 28, 2013 and been referred to the Standing Committee on the Legislative Assembly for further review.

Summary of Bill 5

The scope of the proposed wage freeze would capture a broad range of public sector and broader public sector employers -- all employers currently subject to the Public Sector Salary Disclosure Act, 1996 (better known as the "Sunshine Law") would be caught, including hospitals, boards of public health and other health providers that receive significant funding from the province.1

Where an employer is subject to the proposed Act, the pay freeze would apply to all levels of employees, directors, officers and other office holders and would capture salary, wages and pay ranges, as well as benefits, perks and other payments that may otherwise be provided to such persons.  In addition to freezing benefit levels, the Bill would also prohibit any benefit from being paid in recognition of: (i) length of employment, (ii) assessment of performance, or (iii) successful completion of programs or courses of professional or technical education, even if such benefits are currently provided for under the employee's applicable compensation plan. 

The Bill would place an obligation on all subject employers to provide the responsible Minister with compliance reports.  Interestingly, whereas the Bill would require all employers to comply with the Act, any overpayment of compensation in contravention of the Act would create an onus on the employee who received the additional payment.  The Bill provides that any such payments would be treated as a debt to the employer and would be fully recoverable including by means of setting off such amounts against future compensation owed to the employee. 

Background to the Bill

Bill 5 may seem familiar to some observers. The provisions of the Bill are essentially identical to Bill 92 (Comprehensive Public Sector Compensation Freeze Act, 2012) which was introduced as a PC private member's bill in May 2012.  Bill 92 was defeated on Second Reading.  In debate over Bill 92, both the Liberal and NDP MPPs strongly criticized the Bill citing, among other concerns, its potential illegality in overriding collective bargaining rights for public sector employees. 

In light of the PC's minority position, it is uncertain whether this latest effort will pass when the Bill returns to the Assembly on Third Reading.  Bill 5 has, at the very least, outlived its predecessor and has made it through to Second Reading and Committee referral (albeit on a very narrow vote margin of 36-35).

Prior to the prorogation of the Legislative Assembly in the Fall of 2012, the Government had announced that it would be introducing a bill (the Protecting Public Services Act) aimed at restraining compensation across the broader public sector as well as for executives and managers across Ontario's broader public sector, public service and government agencies. The proposed legislation would have:

  • imposed a permanent salary cap for certain new executives at no more than twice the Premier's salary (or other amount provided for in the regulations);
  • frozen earnings for two years for certain managers eligible for performance pay; and
  • required subject employers to negotiate collective agreements "consistent with the Province's goals to eliminate the deficit and protect the delivery of public services" as expressed in mandates issued by Management Board of Cabinet, from time to time.

Now that the Legislature has resumed sitting, it is yet unclear whether the government will take up its pursuit of a public sector compensation freeze by tabling its own bill, in the form of the Protecting Public Services Act or in another form.

Compensation restraint legislation is not new to hospitals and other organizations in the public and broader public sector.  The Public Sector Compensation Restraint to Protect Public Services Act (the "Restraint Act") froze the compensation of non-unionized employees and office holders employed in the public sector and much of the broader public sector for two years, beginning in March 2010 and expiring on March 31, 2012.

The government chose not to extend the Restraint Act restrictions when they expired, but instead introduced new compensation restrictions under the Broader Public Sector Accountability Act (the "BPSAA"). Of retroactive effect to March 31, 2012, the provisions under the BPSAA primarily restrict executive and office holder compensation and cap the performance pay organizational "envelope" for all non-unionized employees (not only executives) in certain broader public sector organizations. 

If either Bill 5 or the Protecting Public Services Act were enacted, this would represent an important departure from prior approaches to legislated wage freezes, potentially applying pay freezes equally for all employees, including those who are unionized, and expanding the scope of these restrictions across a comprehensive range of public sector and broader public sector organizations.

Looking Forward

Bill 5 serves as an important reminder that public sector and broader public sector compensation will remain a key political issue in light of Ontario's challenging financial straits. Interested parties from across the health sector and beyond will undoubtedly be keenly following the progress of Bill 5 as well as other legislative developments in this area.


1.The Sunshine Law covers the Government of Ontario, crown agencies, municipalities, certain prescribed organizations including hospitals and boards of public health, as well as other public sector employers that receive a significant level of funding from the Province (defined as receiving more than $1,000,000 in government funding annually or 10% of an entity's annual revenues from the government if the total is over $120,000).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions