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Pay hikes for Ontario public sector execs to require ministerial approval
Pay hikes for public sector execs will have to pass a political sniff test by cabinet ministers with election looming next June.

TheStar.com
June 9, 2017
Rob Ferguson

Pay hikes for top executives at colleges, hospitals, school boards and other broader public sector employers in Ontario will now have to pass a political sniff test.

In the wake of a public relations fiasco that saw the Metrolinx transit agency propose a maximum raise of $118,000 a year for its chief executive and some college presidents making similar gains, cabinet ministers will now get the final say on increases, as a five-year public sector pay freeze is lifted.

The new rules for 360 broader public sector agencies came in a two-page directive Friday from Treasury Board President Liz Sandals, the cabinet minister in charge of the government’s finances.

From now on, ministers will have to sign off on the proposed maximum increases for executive teams at agencies under their control as well approve of the other organizations used as comparators for setting wage ranges in compensation reviews. The executive compensation plans, detailing the pay hikes, must be posted prominently on each public sector employer's web site.

Under this process a hospital, for example, could set a maximum level of increase for its executive team as a whole, but retain the flexibility to decide which executives get the biggest raises.

The goal is to “find a balance between the careful management of public dollars and the need for broader public sector entities to recruit and retain talented executives,” Sandals said.

Premier Kathleen Wynne slammed the door on big raises for public sector executives in February after days of controversy when a number of agencies proposed hikes that she said were “just too high” and “out of whack.”

At some colleges, presidents were in line for raises of 50 per cent, prompting Wynne to accuse public-sector organizations of “gaming the system” as the government balances the budget and ends the pay freezes.

The premier then issued an order that any raises be “modest” with “low annual percentage increases” as part of damage control efforts to manage the political fallout.

A threshold on what percentage increase is acceptable will not be set, officials said Friday.

The furore over the proposed raises in January and February fuelled criticism from opposition parties that the Liberal government is out of touch with ordinary citizens concerned about how their hard-earned tax dollars are spent.

With a year until the next election, the Liberals who are struggling in most public opinion polls behind the Progressive Conservatives, are keen to show they are paying attention to pocketbook issues. They have proposed a raise in the minimum wage to $15 by 2019 and free pharmacare for everyone under 25.

The government recently passed a law to reduce hydro rates by an average of 25 per cent, including the 8 per cent provincial HST cut on electricity bills in January.

But the Conservatives and NDP have warned the long-term interest costs of that cut, by spreading the costs of hydro system improvements over 30 years, will cost $25 billion in interest.