Ontario’s Bill 124 led to overspending in third quarter, financial watchdog finds

Queen’s Park in Toronto, Monday, Feb. 20, 2023. The Ontario Legislative Assembly resumes sitting tomorrow. THE CANADIAN PRESS/Frank Gunn

Remedial salary payments to Ontario’s public sector workers as a result of the Doug Ford government’s wage-cap law may have contributed to overspending, according to a new report.

The Province’s Financial Accountability Office (FAO) released its third quarter spending report on Wednesday morning saying Ontario’s spending plan was up $2.3 billion as of Dec. 31, 2023.

Unaudited spending for the quarter was up $400 million.

In terms of planned spending, the increases are primarily in the health ($1.5 million) and education sector ($2.6 million).

“Higher than planned spending is partially due to compensation for the impact of wage restraint under Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019,” the report reads.

“The spending related to Bill 124 will not have a fiscal impact in 2023-24 because it was already recorded as a liability in 2022-23.”

The FAO has previously said that Bill 124 is expected to cost the government about $13.7 billion.

This would be for retroactive salary payments between 2022 and 2028.

Bill 124, which was passed in 2019, capped wage increases for public sector workers for a three-year period.

Multiple courts found the legislation to be unconstitutional, resulting in the bill’s repeal in February.

While the case was being heard in court, the government has slowly been paying remedies to these workers, which include nurses and teachers, to make up for lost wages.

The FAO suggests spending related to Bill 124 will not have a fiscal impact in 2023-24 because it was already recorded as a liability a year earlier.

The report also found the province’s contingency fund stands at about $5.1 billion. The fund is used to address spending pressures or fund program changes during the fiscal year.