Ontario wants to pool public sector benefits, potentially saving millions
Oct. 9, 2019
The Ontario government is looking to save $115 million a year by pooling the benefits of the broader public sector by 2021.
Treasury Board president Peter Bethlenfalvy is expected announce the move Wednesday--an idea he said was suggested and strongly supported during two months of consultations with public sector bargaining groups and employers earlier this year.
“This is an opportunity to take advantage of economies of scale, and collaborate together to find efficiencies,” Bethlenfalvy told the Star.
The province has been looking for ways to save money, and Bethlenfalvy said the idea of pooling benefits “is the one we are focusing on right now” from the consultations.
It was “the one that got pretty widespread support--it was mentioned by numerous employers as an opportunity.”
Further consultations to work out the specifics will be held in 2020, and the new plan, which will be voluntary, should be in place by the following year.
Bethlenfalvy said some pooling exists now, but the new plan would end the current patchwork system.
The new system is being targeted at the health care sector, as well as colleges and universities.
“This is about finding efficiencies and collaborating through consultations, and reflecting that we listen,” he said.
The move is part of the government’s focus on public sector compensation, which represents $72 billion, about one half of government spending.
The Ford government has already cut $215 million a year from its payroll with more than 2,400 civil servants having taken buyouts as of last June.
As well, the government has proposed legislation that would cap public sector wage increases at one per cent.
In last Sunday’s deal reached with the Canadian Union of Public Employees’ school support staff, both benefits and wage increases were limited to one per cent a year over the life of the three-year contract.
However, Education Minister Stephen Lecce also opened the purse strings to help boards rehire laid-off CUPE staff--at $20 million a year--and reinstate a $58-million annual fund so more special education staff will be on the front lines in schools.
Bethlenfalvy noted that since taking office, the government has realized some major savings--including an estimated $1 billion over five years through central procurement--along with smaller efficiencies, such as getting rid of land lines in ministers’ offices.
The next round of benefits consultations “will explore stakeholders’ needs, find common objectives, define participant parameters, and develop a viable governance framework and strategy for implementation. Participation in any arrangement would be voluntary,” the treasury board said.
Bethlenfalvy called the change “an important approach to doing things differently.”
About a dozen employers in the broader public sector already participate in a pooled benefits plan.
Last April, in a speech to the Canadian Club, Bethlenfalvy spoke about the province’s fiscal situation, saying the government is “focused on controlling spending, balancing the budget and restoring sustainability to government.”At that time, the 2018-19 provincial deficit was estimated to be $15 billion, but Bethlenfalvy and Finance Minister Rod Philips recently announced that the final figure was actually $7.4 billion.