Bill 124 retroactive pay costs Ontario government nearly $1B

The Ford government has been forced to give health-care workers nearly a billion dollars in back pay after a court struck down the province’s controversial wage suppression legislation.

The 2019 law, known as Bill 124, capped wage increases for nurses and other public sector workers at one per cent a year for three years but was ruled unconstitutional in November.

While the government is appealing the court ruling, the Ontario Nurses Association immediately triggered a renegotiation clause in its contract that led to retroactive payments for the 2022-2023 union contract.

Instead of being held to a three per cent wage increase for the three-year period, nurses will now receive a total of 6.75 per cent for the term of the contract. The payments, according to the union, have already gone out.

In a new report, Ontario’s Financial Accountability Officer said the cost to the province would be approximately $900 million, according to publicly available data, with a larger bill on the horizon if the province loses a future court battle.

“If the government is unsuccessful in its appeal and all hospital employees are awarded retroactive compensation, the FAO estimates that hospital spending could increase by an additional $2.7 billion from 2022-23 to 2027-28, compared to the FAO’s current spending forecast,” the report states.

The Ontario Court of Appeal is scheduled to hear the province’s appeal in late June.

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