Ontario Tories Push Liberal Government To Give More Consideration To Taxpayers’ ‘Ability To Pay’

A Foreword by Niagara At Large publisher Doug Draper

I’ve expressed my share of doubts about the direction Tim Hudak and his Ontario Conservatives, but I think they are standing up for the interests of most of the province’s taxpayers on this one.

Ontario Conservative Party leader Tim Hudak

Hudak and his party are tabling an “Ability To Pay Bill” this September which is calling for what many municipalities across Ontario, including municipal governments across Niagara, have been calling for from the province’s Liberal government for past eight years – changes to an arbitration system that bases the wages and benefits of police, firefighters and other public sector workers on taxpayers’ ability to pay.

In recent years, Niagara’s regional council, along with some of the region’s local councils, have expressed increasing frustration over their attempts to keep the wages and benefits of police and firefighters, in particular, in line with what they feel area property taxpayers can afford. They feel the arbitration system in place typically gives the unions representing police and firefighters virtually everything they want despite cases municipalities have tried to make on behalf of taxpayers.

Municipalities in Niagara and other regions of the province have repeatedly pressed the Ontario government to reform the arbitration system in ways that would make provincially appointed abitrators give more consideration to a region’s ability to pay, but the government has so far made no move to reform the system.

In Niagara’s case, these arbitration decisions have often left taxpayers in this region paying salaries and benefits for police and firefighters that are on par with those paid regions where wages are higher and unemployment rates are lower than they are here.

And here is another important thing that should be taken into consideration. Unlike the salaries for teachers, for example, that are paid for by the province through income taxes (a progressive tax that are based on a person’s income and ability to pay), the salaries and benefits of police and firefighters are paid through property taxes, which are regressive in the sense that a senior on a fixed income or a person who has lost a good paying job and may not be working for minimum wage to keep their home, is paying the same for these wage hikes as someone with an income of $80,000 or $90,000 a year.

Some municipal representatives have speculated that one of the reasons the provincial government has not taken their call for reforming the arbitration system seriously enough to do anything about it is that (outside of the Ontario Provincial Police) they don’t get stuck with the bill for police and firefighter salaries. That tab is picked up by municipalities and their local ratepayers.

So it will be interesting to see how an attempt by the provincial Conservative Party to get a reform bill for arbitrating these salaries benefits, based on municipal ratepayers’ ability to pay, will be received by the government Liberal Party and NDP.

For our readers’ information, Niagara At Large is posting a September 17 media release on this proposed bill, submitted by Tim Hudak and his Conservaties, below.

FOR IMMEDIATE RELEASE, September 17, 2012

PCs’ ABILITY TO PAY ACT STANDS UP FOR TAXPAYERS: HUDAK

 QUEEN’S PARK: It’s time to stand up for taxpayers by fixing a broken system that awards unaffordable contract settlements to government union employees, Ontario PC Leader Tim Hudak said today. “And to do it, we are bringing forward our Ability to Pay Act.

“We need a freeze on new government spending and a mandatory, across-the-board government employee pay freeze for two years,” Hudak said. “But what comes after? Without bold reforms to the things that drive wages to these heights in the first place – such as the way arbitrators arrive at settlements – we’ll be right back where we started from.” 

With a million employees and one out of every three workers considered an essential service, Ontario’s salary and benefit costs make up more than half of all program expenses, Hudak noted. “While the economy is barely growing, these workers continue to receive pay increases. And when government employers and their unionized employees, like police and fire fighters, cannot agree on new contracts, the disputes wind up before arbitrators, who often award increases that taxpayers cannot afford.”

For the last nine years, the government has ignored the calls of local officials to change the system, Hudak noted. “The government knows full well some councils have been forced to increase property taxes, impose user fees or cut services to pay for these contracts – at the taxpayers’ expense.” 

In just one such example, an arbitrator gave a six per cent pay increase to TTC unions, which will cost taxpayers’ a $100 million, Hudak added. 

Ontario PC House Leader Jim Wilson, the sponsor of the bill, said “once again the Ontario PCs’ are pressing ahead with bold ideas that now include our Ability to Pay Act – another important step to get our fiscal house in order and ensure scarce tax dollars go to the things people care about, like front-line health care and classroom education.” 

The Ability to Pay Act makes this its goal, in three key ways:

• First, arbitrators’ decisions must factor in specific economic and budgetary factors, like the taxpayers’ ability to pay, when making decisions and explain those decisions in writing;  
• Second, establish a panel of independent arbitrators to decide public sector cases within three months; and  
• Third, dedicate an Ability to Pay Division would publish comparative information on compensation, as well as proactively disclose all arbitration decisions – call it sunshine and fairness.

 Hudak concluded that “the Ability to Pay Act is about standing up for taxpayers and restoring economic prosperity. We need all parties in the Legislature to get behind this bill and pass it into law, so we can help rein in overspending and build a solid foundation for private sector job creation.” 

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