The Ontario government is giving more than 1,250 provincial tax collectors severance packages worth up to $45,000 each to change employers.
The provincial tax collectors will become federal employees as part of Ontario's plan to harmonize sales taxes with Ottawa.
The province is honouring an existing collective agreement, negotiated by a previous provincial government, by making the payouts, said Premier Dalton McGuinty.
The sales-tax harmonization was announced last March and Finance Minister Dwight Duncan said about 2,000 Revenue Ministry workers would become federal employees while the remaining 1,400 jobs would be phased out over a three-year period through attrition and other measures.
The move is an attempt by the province to cut jobs in the public sector by five per cent to control the provincial deficit.
Ontario signed an agreement with the Canada Revenue Agency, guaranteeing all tax collectors affected by harmonization would be offered jobs by the CRA in the same geographic location.
The transfers, even with the severance payouts, will still result in savings in the future, said Duncan.
The provincial employees who accept the job offers will move into their new federal roles in two phases: The first on Nov. 25, 2010 and and the second on March 1, 2012.
Each employee will be entitled to severance pay in the amount of one week per year of service to a maximum of 26 weeks.
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