Liberals promise bill to cap public sector executive compensation, eye pensions

Party plans to introduce legislation in Ontario on the issue next spring

TORONTO (CP) — Ontario's governing Liberals plan to bring in legislation next spring that would allow them to limit compensation to senior executives across the broader public sector, from hospitals and universities to the province's big utilities and Crown corporations.

The New Democrats have been demanding hard caps on those salaries for years. The minority Liberals promised to address it in 2012 and last spring in order to win their support to pass the budget and avoid an election.

If the upcoming legislation goes through, the government would have direct control over compensation, including salary, bonuses and severance packages, Government Services Minister John Milloy said Monday.

But he won't say where the government would set a hard cap, which the New Democrats want pegged at $418,000 — twice the premier's annual salary.

The Liberals promised legislation last year to do just that, with some exemptions, but the legislature was prorogued a month later.

Milloy said this time, the government will develop a framework for each sector that will look at a number of factors.

“You have different sizes of hospitals, different complexities, etc., that goes across the way,” he said. “And there will be hard caps within that.”

But the opposition parties want to know why it's taking so long.

The Liberals could have backed an NDP private member's bill last week which would have capped salaries, or introduced their own legislation on Monday, said New Democrat Catherine Fife.

“They've been purposely very vague all along, and they've been saying they're going to do this for two years,” she said.

“It's another promise for accountability and I think people are running out of patience on this.”

But Milloy said the upcoming legislation goes beyond what the NDP proposed, which just dealt with salaries.

“We want to take a look at perks, we want to take a look at severance, we want to take a look at the entire package,” he said.

“And I think you would all agree oftentimes that is where some of the concern on the part of citizens has been, when they find out when someone leaves a job and has a huge severance package.”

The Liberals have approved generous severance packages and bonuses for executives in the public sector, including a $406,000 golden handshake for former eHealth Ontario CEO Greg Reed after barely three years on the job.

They recently landed in hot water over a $7-million bonus package for executives with the Toronto 2015 Pan Am Games committee, including a $780,000 pay out for CEO Ian Troop.

Troop, who was paid a base salary of $390,000 last year plus an $87,000 bonus, will be eligible for a $780,000 bonus if the 2015 games come in on budget and on time.

The Liberals, who are facing a nearly $12-billion deficit this year, also announced Monday that they're eyeing pension plans in the electricity sector, with the aim of making them “more affordable and sustainable.”

Finance Minister Charles Sousa said he's asking Jim Leech, the outgoing head of the Ontario Teachers' Pension Plan, for advice about Hydro One, OPG, the Independent Electricity System Operator and the Electrical Safety Authority pension plans.

Leech will be looking at equal cost-sharing between employers and employees for ongoing contributions and more affordable pension benefits, Sousa said. He'll also be looking at pooling assets of the plans.

Those pension plans generally require a lower share of contributions from employees while providing generous benefits, and the cost is being borne by ratepayers, the government said.

The Liberals have been taking heat for cancelling two gas plants ahead of the 2011 election, which the province's auditor general says could cost up to $1.1 billion.

The government has forecast electricity rates will climb 33 per cent over the next three years as the province pays to refurbish existing nuclear reactors and contracts for more wind power.

The Liberals are trying to get ahead of the auditor general's annual report Tuesday, which will look at labour costs at OPG, said Progressive Conservative Vic Fedeli.

“They're tinkering at the edges again, appearing to look like they're trying to do something,” he said.

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