Commission on the Reform of Ontario's Public Services

Chapter 15: Labour Relations and Compensation
Wage freezes have been common tools in previous governments’ deficit fights. However,
history shows that wage freezes are often followed by wage catch-up periods. Such action,
if undertaken in the current fiscal climate, would undermine our longer-term fiscal mandate and
damage labour relations. The <strong>Commission</strong> confronted considerable confusion over what the
Supreme Court decisions 16 mean for issues such as wage freezes. However, it is the
<strong>Commission</strong>’s understanding that the two decisions stress the importance of consultation
when governments seek to achieve their desired industrial relations outcomes. The interests of
positive longer-term labour relations and the emerging law dictate that the same path be
followed at this time: make the fiscal objectives and the implications for labour compensation
very clear, and then negotiate towards securing the desired results.
Previously in Chapter 3, Our Mandate and Approach, the <strong>Commission</strong> provided
recommendations on the size of the workforce and unionization, which we revisit in this
chapter. Focus should be on program outcomes and budgets, and not on arbitrary limits on the
size of the civil service. There should be no ideological or other bias towards or away from
public- or private-sector delivery of services. Such matters should be dealt with from a position
of practical logic: What produces the best result for the people of Ontario? What produces the
best public services at an affordable cost? Increasingly, services should be put to tender to
secure the optimal results. Yet, the winner should not be decided simply on the basis of the
lowest cost. Instead, it should be decided on a quality-adjusted cost basis. For some services,
a measure of quality would include, for example, the ability to provide the services in both
official languages.
Recommendations for compensation and the labour force should focus on the bigger picture.
As long as the system keeps deploying the same short-term solutions (i.e., wage/hiring
freezes, global FTE reduction targets, suspension of performance pay), the government will
continue to find itself in the same situation in the end. A shift in thinking must take place that
moves approaches from short-term solutions to broader sectoral transformation. The lead
problem (and solution) cannot be labour itself. The focus of discussions must begin with
defining what businesses and services the government should undertake and what policy
goals and outcomes the government should seek.
In theory, the system of labour relations in Ontario should allow governments, employers,
employees and employee representatives to work together to deliver the public services that
people depend on. The principles and recommendations below are intended to help bring
reality closer to that theory.
16 Two recent court decisions (Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, [2007] 2 S.C.R. 391,
2007 SCC 27 (“B.C. Health”) and Ontario (Attorney General) v. Fraser, 2011 SCC 20, [2011] 2 S.C.R. 3 (“Fraser”) have further clarified
the need for changes to collective agreements to be made collaboratively and in good faith.
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