The Ford government could have to fork out up to $8 billion if it loses a court battle over a controversial wage-cap law, a new report says.
A coalition of more than 40 Ontario unions, representing around 270,000 public workers, has taken the Ontario government to court over Bill 124, which stifles public sector wages at a one per cent annual increase for three years.
Union lawyers have argued the law infringes on an employee’s constitutional rights around collective bargaining and are asking an Ontario court to strike down the law.
Projections released by the Financial Accountability Office of Ontario (FAO) estimate that a court defeat could cost the province $8.4 billion between 2022-23 and 2026-27.
That calculation assumes public sector workers who had already had wages capped by Bill 124 would be compensated, while the bill would not apply to future negotiations.
The report estimated a total of $2.1 billion could be due to public sector workers in retroactive payments if Bill 124 is overturned.
The province, which wants the case dismissed with costs, argues the court should not weigh in on the matter, as it’s a political one.
“The court should decline the invitation to assume judicial control over public sector compensation expenditures,” the province said.
Ontario government lawyers further argue the bill is indistinguishable from “broad-based, time-limited compensation restraint statutes upheld by the Supreme Court.”
The groups taking the government to court want the law deemed unconstitutional, along with damages and costs. They also want an order that any affected collective agreements be set aside and returned to bargaining.
The Ford government has lost several high-profile court cases since winning election in 2018, including its fight against the carbon tax, election finance rules and its refusal to release cabinet mandate letters.
A decision on whether to declare Bill 124 null and void is expected next year.
— with files from The Canadian Press