Spending on government worker wages, benefits and pensions in Ontario has increased by as much as 47% between 2005/06 and 2013/2014, making it harder for the province to balance its books.
These are the findings of a new study by the Fraser Institute, called How Compensation Spending Consumes Provincial Government Resources in Ontario.
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The study calculates that the compensation increase of 47% is greater than the combined rate of inflation and provincial government job growth (26%). It’s also greater than all other program spending (38.8%) for that period.
“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,” says Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of the study.
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While Ontario has recently taken steps to limit compensation spending, this spending is still responsible for nearly three-quarters of new program spending from 2009/10 to 2013/14, the study notes.
In 2013/14, Ontario spent $60.2 billion on employee compensation—or approximately 52% of the province’s total program spending budget, up from 50% in 2009/10.
Read: Higher wages, pensions more likely for public sector: Fraser Institute
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.