The rising cost of living — coupled with suppressed wages in Ontario’s public sector — could lead to staff shortages and a decrease in the quality of public services, the province’s Financial Accountability Office (FAO) has warned.
The FAO made the finding in a new report that analyzed wages paid to public servants employed in Ontario, including nurses, teachers and college staff.
“The province may still need to increase wages beyond the assumptions in the FAO’s base case projection to ensure sufficient staffing to maintain existing public services and meet program expansion commitments,” the FAO wrote.
The report found that in the second quarter of 2022, almost nine in 100 nursing and residential care jobs in Ontario were vacant. That equated to 16,315 vacancies, more than twice the rate reported in 2019.
At the same time, provincial plans to expand beds in hospitals and other services will lead to a massive increase in public jobs that need to be filled.
The FAO estimated Ontario will need to add 56,974 public sector workers by 2026-27 to make good on its promises to offer new or expanded services.
“High vacancy rates can result in staff shortages and impact public services,” the report warned.
Wage growth in Ontario has been stagnating since 2011 as a result of policies implemented by former Liberal and current Progressive Conservative governments, the report showed.
In 2020 and 2021, base salary settlements for Ontario public servants increased by one per cent per year as a result of Bill 124, which capped public sector salaries.
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In that time, federal public wages went up two per cent annually, with 1.6 per cent as the rate for municipal employees. The private sector saw annual wage growth of 1.8 per cent.
“Overall, wage growth remains below inflation for employees in the Ontario Public Sector, resulting in real wage declines,” the FAO said.
The report concluded that Ontario may need to increase wages above current forecasts to ensure it can attract enough staff to deliver existing services and promises of future expansion — echoing what organizations like the Ontario Nurses’ Association have been repeating for months.
“Recruiting and retaining our health-care professionals and nursing staff in particular is a most urgent matter for health care in Canada and Ontario — it is a competitive process,” said Dr. Thierry Mesana, president and CEO of the University of Ottawa Heart Institute, in an August statement.
“Recruiting nurses outside the country is neither fast nor easy, and Bill 124 is a threat to both recruitment and retention.”
Meanwhile, Ontario NDP’s official Opposition Interim Leader Peter Tabuns said the FAO report illustrates that “frontline health care workers who helped us through the COVID crisis are feeling burnt out, underpaid and disrespected by the Ford government.”
“Ontario will need tens of thousands more of vital public sector workers like nurses in the coming years. But Doug Ford’s low-wage policy will continue to drive public sector workers away,” Tabuns said.
The FAO’s report also pointed out that “higher wages attract entry into the workforce from other sectors, provinces or countries, or by those recently retired or out of the workforce due to other reasons.”
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