TORONTO — The Ontario government is changing the way it approves pay increases for public sector executives, following some controversial raises.
Treasury Board President Liz Sandals sent a letter Friday to broader public sector organizations, telling them that the government must now approve the comparators they use when determining appropriate salaries, the caps on the salaries themselves and the overall rate of increase for all executives.
The government previously sent colleges back to the drawing board, after many of them compared their salaries to those at much larger organizations then proposed large raises.
Premier Kathleen Wynne also told Ontario Power Generation to come up with a more reasonable salary cap than the $3.8 million it proposed, but OPG declined to change that figure.
The government ultimately approved it. Raises for about 80 executives will total up to $8 million.
OPG said its board "took great care" in arriving at the $3.8-million cap, but voluntarily set the maximum compensation for the CEO much lower at $1,937,500 — with the target at $1.5 million, equal to the current salary.
The power agency, which operates two nuclear sites and is responsible for more than $40 billion in assets, was granted permission by the government to use private-sector comparators because of its unique size and scope.
As a wage freeze lifts, all broader public sector agencies have until September to post their proposals for new executive compensation packages under a framework that caps salaries at the 50th percentile of "appropriate comparators."
Sandals' letter said broader public sector organizations now must get their comparators approved before posting proposed executive compensation changes.
Some organizations will also be allowed to boost salaries each year, though the annual raises can't exceed the Ontario public sector wage increase trend — this year at 1.3 per cent — or the average rate of increase for an organization's non-executive managers.
Metrolinx, the Greater Toronto Area transit agency, also previously got their plan approved that would boost the CEO's pay by up to $118,000, to a maximum of $479,500.
But following public outcry over the OPG and Metrolinx raises, Sandals sent a memo in February to the more than 300 broader public sector organizations saying it expected any increases to be "modest."
The government would deny "unreasonable adjustments to compensation," according to the memo. The approvals for Metrolinx and OPG came after that memo.
Other organizations so far to have new executive compensation packages approved include the Ontario Trillium Foundation, the University of Windsor, St. Joseph's General Hospital Elliot Lake and Manitoulin Health Centre.
Allison Jones, The Canadian Press
