When we last reviewed fiscal pressures on governments to look
for sources of cost-containment and restraint, the pressures were
many. In looking for fiscal relief, some governments were
turning to restraining compensation in the broader public
sector. At the provincial level, the Ontario Government had,
for example, passed wage restraint legislation and also legislation
regarding collective agreements for teachers. At the federal
level, the Canadian Government had intervened in labour disputes
with legislation to get the parties back to work. So where
are we now?
In Ontario, there seems to be relative labour peace with the
teachers once again. The Ontario Government recently
announced an increase in the minimum wage (see our blog dated
January 30, 2014 "Minimum Wage in Ontario to Rise to $11.00/hr" by Alex
Heaslip). But the Ontario Government does not seem done with
trying to restrain wages through legislation. In December
2013, it announced that legislation would be introduced early in
2014 that would provide the authority for the Government to impose
compensation "frameworks" and even a hard cap on the
compensation of senior executives in the broader public sector in
Ontario. This legislation has yet to be introduced, but we
will keep an eye on it as winter marches to spring
At the federal level, we saw a lengthy labour dispute in 2013
between diplomats and the federal government over
compensation. The dispute affected services in Ottawa and
abroad at Canadian embassies, preventing many from obtaining visas
needed to travel to Canada for pleasure, work, and school.
Along the way, the Public Service Labour Relations Board found that
the Federal Government had engaged in bad faith bargaining (arising
from attaching certain conditions to a binding arbitration process
with the union). Ultimately a resolution was reached in the
fall of 2013, but the dispute highlights the difficulties involved
with managing costs in the public sector and the potential impact
on citizens and others who are consumers of the relevant public
More recently in Alberta, we saw the introduction of Bill 46 in
2013. This legislation would have imposed a collective
agreement on Alberta's largest public sector union if
collective bargaining with the Alberta Government failed. The
collective agreement that expired on March 31, 2013 would have been
extended with certain modifications to compensation terms.
This was supposed to take effect by the end of January, but has now
been delayed to March 31, 2014 while negotiations between the
Although some progress is being made by governments in Canada
towards smaller budget deficits and even balanced budgets, the
fiscal pressures remain strong. Based on the recent
statements and actions, containing costs in the compensation of
those employed in the broader public sector will continue to be a
focus of governments across Canada.
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