Government benefits ‘out of step’ with private sector, says expert
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Ontario’s government employees get paid more, take more days off per year, and retire earlier than comparable workers in the private sector, according to research by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
"Queen's Park and the federal government, which has a lot of employees in Ontario, are both struggling financially. Scrutinizing public sector compensation would be a good first step to address their fiscal challenges without affecting services," said Charles Lammam, director of fiscal studies at the think tank and co-author of the study Comparing Government and Private Sector Compensation in Ontario.
"It's important that governments provide competitive compensation to attract qualified employees, but the fact is wages and benefits in the government sector are out of step with the private sector.”
Government employees in Ontario — including federal, provincial and municipal workers — received 13.4 per cent higher wages, on average, than comparable workers in the private sector, revealed research from 2015.
Yet wages are only part of overall public-sector compensation, which accounts for about half of annual provincial government program spending.
Government workers in Ontario enjoy much more generous benefits, too, according to the study.
Eight of 10 public sector employees are covered by a defined benefit pension plan, compared to just 11.4 per cent in the private sector.
Government employees also retire 1.4 years earlier and take four more personal days off per year (10.9 days versus 6.8).
Finally, public sector workers are six times less likely to experience job loss, according to the study.
"The Ontario government, in particular, is struggling with persistent deficits and soaring debt, and bringing public-sector compensation in line with the private sector would help Queen's Park better control spending," said Ben Eisen, director of the Ontario Prosperity Initiative at the Fraser Institute.
