ONTARIO GOVERNMENT PROPOSES NEW PUBLIC SECTOR COMPENSATION RESTRAINT LEGISLATION
On July 8th the Ontario legislature reintroduced as Bill 8 that amends the Ombudsman Act, see: http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&Intranet=&BillID=3000
The Bill was carried on first reading. (PDF: http://www.ontla.on.ca/bills/bills-files/41_Parliament/Session1/b008.pdf)
Originally introduced on March 24, 2014, the Ontario government introduced Bill 179, the Public Sector and MPP Accountability and Transparency Act, 2014. If passed, Bill 179 would give the government the authority to create comprehensive compensation frameworks for certain employers in the broader public sector (“BPS”), and would implement a number of measures to enhance “accountability and transparency” in the government and the public sector.
COMPENSATION RESTRAINT – A NEW STATUTE
Bill 179 would effect changes to the compensation restraint measures contained in Part II.1 of the Broader Public Sector Accountability Act, 2010 (“BPSAA”) [these changes were introduced in the 2012 Budget, and implemented by Bill 55]. To accomplish this, Bill 179 would enact a new statute called the Broader Public Sector Executive Compensation Act, 2014 (“BPSECA”) which would complement the BPSAA.
But for one significant addition, the BPSECA would primarily apply to the same BPS organizations that are currently subject to Part II.1 of the BPSAA – hospitals, school boards, universities and colleges, Hydro One, the Independent Electricity System Operator, the Ontario Power Authority and Ontario Power Generation (collectively, “designated employers”).
Of significance, the BPSECA would also apply to libraries. Schedule 9 sets out that local boards as set out in the Municipal Act and City of Toronto Act (including library boards) would be subject to the Ontario Ombudsman.
The BPSECA would also apply only to “designated executives”. This term is defined in a similar fashion to the BPSAA definition, and would apply to any of the following individuals who make at least $100,000 in compensation on an annualized basis:
the head of the organization (whatever his or her title);
a vice president, chief administrative officer, chief operating officer, chief
financial officer, chief information officer or other executive; or
a director of education or supervisory officer of a school board.
(Noticeably absent from the definition of “designated executive” are full-time members of board of directors, board of governors and board of trustees, as well as provosts and deans of colleges and universities.)
“The BPSECA would not itself establish restraints on compensation; rather, it would give the government the authority to do so in the future by directive and regulation. The key features of BPSECA can be summarized as follows:
the Management Board of Cabinet would have the authority to issue directives to BPS organizations requiring them to provide detailed information related to compensation and other payments made to designated executives, including information of specific individuals;
the Lieutenant Governor in Council (i.e. Cabinet) could make regulations establishing “compensation frameworks” that could apply to all designated employers and designated executives, or could apply on a more limited class or specific individual basis;
a compensation framework would govern the compensation that could be paid by a designated employer to a designated executive, and could establish limits on any element of the compensation plan, including salary, benefits, perquisites, bonuses, incentives, etc.; and
compliance with a compensation framework would be mandatory, and could be enforced through a number of measures (for hospitals, a compensation framework would take precedence over section 9 of the Excellent Care for All Act, 2010).” (Source: Hicks Morley: http://www.hicksmorley.com/images/pdf/2014/20140327_FTR_Now_BPS_Restraints.pdf)
There is apparently an exemption to this that one may apply for.
If you have any comments or concerns, please feel free to contact your FOPL board of directors or Stephen Abram, FOPL executive director at sabram@fopl.ca.