Commission on the Reform of Ontario's Public Services

Labour Relations and Compensation
There are over one million BPS employees in Ontario, about 70 per cent of whom are
unionized, compared with about 15 per cent in the private sector. This makes effective unionmanagement
relationships important. Any government wanting to change the delivery of
services must work with the people who deliver those services and with the unions that
represent those people.
Labour costs account for about half of all Ontario government program spending. As such, the
target of 0.8 per cent program spending growth cannot be attained without moderation in the
growth of public-sector total compensation, whether through base wages; premium payments
such as overtime, shift premiums, merit pay or movement through “grids”; or pension costs.
Public-sector wage growth has moderated since the government introduced a restraint policy
in March 2010. However, many major agreements, including those covering Ontario’s almost
25,000 physicians and over 200,000 teachers, have not been renegotiated since then.
Labour compensation is but one consideration of labour relations. Ultimately, the goal is
to have a highly competent public service working at a high level of productivity, delivering
excellent public services. Tactics geared towards short-term fiscal gains such as wage freezes
and limits on the number of civil servants should be avoided. Wage freezes damage labour
relations and are often followed by wage catch-ups. A focus on program outcomes and
budgets will naturally and more efficiently result in a smaller civil service than arbitrary rules.
There should be no ideological or other bias towards or away from public- or private-sector
delivery of services, only a consideration of practical logic: what produces the best result for
the people of Ontario at an affordable cost?
The principles below are intended to support the transformation in labour relations that will
best allow management and labour to work together to deliver excellent public services.
� The labour relations system in Ontario should be balanced, effective and transparent.
It should respect the interests of both employers and employees, provide value to citizens
and be seen to do both;
� Collective bargaining agreements that are negotiated between the parties are preferred
to settlements or outcomes that are either legislated or arbitrated;
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