With a projected $4.3-billion deficit this year and relentlessly mounting debt, the Wynne government needs to better control spending to repair the damage to Ontario’s finances. A key area of spending to scrutinize is the wages and benefits of government employees, which are responsible for roughly half of Ontario government program spending each year.
There’s ample reason to better control compensation costs. While the government must provide competitive compensation to attract qualified employees, the wages and benefits of government employees tend to eclipse those for comparable private-sector positions.
A new Fraser Institute study spotlights the wage premium enjoyed by government employees in Ontario at all levels (federal, provincial and local). Using Statistics Canada data from 2015, the study finds that government employees receive, on average, 13.4-per-cent higher wages than comparable workers in the private sector. This wage premium accounts for differences between individual workers in the two sectors such as age, gender, education, tenure, experience, and type of work.
But wages are just one component of total compensation, which includes pensions, early retirement and job security. As any business owner or manager will tell you, it’s the total cost of compensation that matters rather than the individual components. Yet even on various non-wage benefits, the available Statistics Canada data suggests government employees in Ontario come out ahead.