On the heels of the damning report from CFIB of earlier this week that revealed there was a growing disparity between private and public sector salaries and benefits, there comes a new Fraser Institute study that exposes just how wide the pay gap has become in Ontario.
The Fraser Institute released today: “How Compensation Spending Consumes Provincial Government Resources in Ontario.” It notes the following facts:
- Compensation for Ontario Government workers skyrocketed by 47% in less than a decade with the many generous public sector settlements awarded by the Liberal Government.
- The 47% increase in salary and benefits for Ontario public sector workers grew at a significantly faster rate than either inflation (15.1%) or the provincial economy.
- Overall program spending (the amount Ontario spends every year after paying interest on debt and not including capital investments) rose 42% during that same period, from about $80 billion to over $115 billion. Spending on things other than compensation rose 39 per cent. And the number of government jobs increased by about 11%.
- Now, in Ontario, because of the high public sector pay and benefits awarded, up to three-quarters of all new spending on programs goes to cover staff pay.
- Prior to the 2008 recession, the Liberals doled out generous increases to teachers, doctors and other stakeholders. (Since 2008, compensation increases have slowed with the Government trying to come to terms with the year-over-year deficit. Today, the annual deficit is at $12.5 billion, which is amplified as a result of declining revenues in the Province’s slowing economy).
Lead author Charles Lammam made the point in releasing the report just because we are spending more on provincial bureaucrats does not translate to Ontarians getting more bang for the buck.
“It’s not entirely from new nurses, police officers, teachers or whatever… our analysis suggests it’s not necessarily going to improve new or better quality services in the province. When governments spend more it doesn’t necessarily translate into more and better services.”
This is precisely the rub. The ever-increasing costs of big government’s bloated workforce and out-of-control spending is at the heart of the arguments in many of By George’s previous “big government” posts.