Skip to main content

Two years compensation freeze and THEN the public sector austerity starts. The official Liberal plan.

Finance Minister Dwight Duncan’s speech to public sector labour leaders proposing a compensation freeze was accompanied by a power point slide show.  And it makes for some interesting reading.

The government claims that the main period of austerity will occur, not now or next year, but in the period between 2012-13 and 2017-18.

That would mean eight years of austerity -- two for the compensation freeze and then six years of much lower funding increases.

Indeed, the austerity we are currently seeing is very modest compared with the austerity proposed for the years beginning 2012-13, when program expense increases will, allegedly, fall to less than 1/3 of the increases the Liberals set up to 2008-9.

If the austerity proposed for the years starting in 2012-13 is actually implemented, we would be in the hopper. 

For the current period the government says it has reduced program funding increases significantly -- from an average of 6.6% for the period up to 2008-9, to  4.8%.  That's why we are seeing hospital service cuts and layoffs. 

But for the period beginning 2012-13 through 2017-18, the government says it will reduce program increases to just 1.9%

Well, if the government has to implement a wage freeze in the current period (when program funding is going up  two and a half times more rapidly than the increases planned for the period beginning 2012-13) then there may be more difficult times ahead beyond the current two year time frame.

So, the government warns (slide 14 of the power point) that “Even after compensation structures have been frozen for two years, there is little room for compensation increases”. It then explains the proposed 1.9% annual increases in program expenses: 1.2% for population growth and 0.7% for growth in costs or utilization.

How seriously should we take these claims? Well it will be after the election, so, in that sense, all bets are off.

But also, even the Harris government did a major about-face on hospital funding after being pilloried for a few years on that issue.

So I take the 1.9% as a bargaining position.

Nevertheless, the measly 1.9% program expense increases starting in 2012-13 is how the government currently plans to return to a balanced budget by 2017-18. So, the current two year austerity initiative may not be the end of it, not unless there is a significant change in government policy.

The government’s claim in the power point that economic growth alone will not restore the fiscal balance is based upon claims made in the 2010 Budget, which, as I’ve suggested elsewhere, even the government now suggests are out of date, due to significant economic growth in the current period. So this may provide some hope. But I am not so sure this is likely to re-occur for the period beginning 2012-13 as the Budget estimates for growth in 2012 and 2013 were already quite high (3.2% and 3.0%).


dallan@cupe.ca
Labels:

Comments

Post a Comment

Popular posts from this blog

Ford government fails to respond to 72% increase in COVID inpatient days, deepening the capacity crisis

COVID infections continue to drive up hospital costs and inpatient hospitalizations in Ontario. For the most recent fiscal year (April 1, 2022- March 31, 2023) hospital stays related to COVID cost $1.221 billion, according to new CIHI data.   This is about 4% of total hospital spending, creating a very significant new cost pressure beyond the usual pressures of population growth, aging, inflation, and rising utilization.   Costs for COVID related hospitalizations increased 22.2% in Ontario in 2022/23 from the previous fiscal year, rising from $999 million to $1.221 billion.  That rise is particularly notable as the OMICRON spike of late 2021 and early 2022 had passed by the the 2022/23 fiscal year.   The $222 million increase in COVID hospitalization costs came in the same year as the Ford government cut special COVID funding and, in fact, cut total hospital funding by $156 million.     In total, there were 60,653 COVID hospitalizations...
Post a Comment
Read more

The long series of failures of private clinics in Ontario

For many years, OCHU/CUPE has been concerned the Ontario government would transfer public hospital surgeries, procedures and diagnostic tests to private clinics. CUPE began campaigning in earnest against this possibility in the spring of 2007 with a tour of the province by former British Health Secretary, Frank Dobson, who talked about the disastrous British experience with private surgical clinics. The door opened years ago with the introduction of fee-for-service hospital funding (sometimes called Quality Based Funding). Then in the fall of 2013 the government announced regulatory changes to facilitate this privatization. The government announced Request for Proposals for the summer of 2014 to expand the role of "Independent Health Facilities" (IHFs).  With mass campaigns to stop the private clinic expansion by the Ontario Health Coalition the process slowed.   But it seems the provincial Liberal government continues to push the idea.  Following a recent second...
Post a Comment
Read more

The hospital crisis: No capacity, no plan, no end

While Canada has achieved universal public healthcare coverage, that does not mean conservative forces have given up trying to erode that coverage and expand corporate care where it does not currently exist. The battle has become particularly intense in Ontario under the Ford Progressive Conservative government, which is implementing serious cuts to the level of care and moving to bring in for-profit mini-hospitals. Inadequate Staffing.   Less and less of hospital spending is on staff.   Employee compensation as a share of hospital expenditures has consistently shrunk in Ontario. This is not some immutable law of hospital development.  It is in stark contrast with the rest of Canada, where compensation has become a larger share and now accounts for 67.1%. Hospitals in provinces other than Ontario now have 18 percent more staff per capita than hospitals in Ontario. Overall, if Ontario had the same staffing capacity as the other provinces and territories, there would be another...
Post a Comment
Read more