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Spending on government workers in Ontario increased substantially

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Staff writer ▼ | March 26, 2015
Ontario government
Fraser Institute   Compensation spending increased by 47.1 percent

Spending on government worker wages and benefits in Ontario has increased substantially since 2005/2006, hindering the province's ability to balance its books, finds a study by the Fraser Institute.

"As the Ontario government prepares to table its budget with yet another deficit, now is a critical time to scrutinize all forms of government spending, and especially compensation spending, which has grown at a significant rate," said Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of How Compensation Spending Consumes Provincial Government Resources in Ontario.

The study calculates that between 2005/2006 and 2013/2014 (the latest year of available data), compensation spending by the Ontario government - including wages, benefits, and pensions - increased by 47.1 percent, faster than all other program spending (38.8 percent) and well beyond the combined rate of inflation and provincial government job growth (26.0 percent).

"Ontarians should ask themselves if the jump in compensation spending for provincial government employees has translated into more or better services for their families," Lammam said.

While the government has recently taken steps to restrain compensation spending, compensation spending is still responsible for nearly three-quarters of new program spending from 2009/10 to 2013/14 and it now consumes a larger share of government resources.

In 2013/14, the Ontario government spent $60.2 billion on employee compensation—or approximately 52.0 percent of the province's total program spending budget, up from 50.1 percent in 2009/10.

Had compensation spending's share of total program spending been restricted to the 2009/10 level, the province would have saved $14.7 billion over a five-year period and sliced $4.4 billion from the 2013/14 budget deficit.

"With the government expecting ongoing deficits, further restraint on compensation spending would help lessen the strain on Ontario's finances," Lammam said. â– 


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