TORONTO, Sept. 20, 2012 /CNW/ - "This afternoon, the media reported that
the Government of Ontario announced its intention to cap salaries for
new employees at Ontario's hospitals, and across the Broader Public
Sector (BPS), at double the Premier of Ontario's salary, or
approximately $418,000 per year. According to these reports, the
proposed cap would not apply to existing employees.
An analysis of the 2010 Public Sector Salary Disclosure (PSSD) showed
that only 77 of the 207,000 people employed by Ontario's hospitals
reported compensation levels (including benefits) above $418,000. This
group - which includes CEOs, senior managers, physician employees, and
other clinical staff - represents less than four one-hundredths of one
percent of the total number of hospital employees in Ontario. Capping
their compensation would save approximately $4.7 million per year; this
represented a total of less than three one-hundredths of one percent of
hospitals' total expenditures in 2010.
If the media reports are accurate, the Ontario Hospital Association
(OHA) is extremely disappointed with the Government of Ontario's
This is another example of the Government of Ontario and legislators
devaluing the work and skills of hospital leaders, and those who lead
Ontario's vital BPS organizations. BPS organizations are responsible
for managing approximately half of Ontario's annual budget; it is in
taxpayers' interests that these organizations be led by the most
skilled, most experienced leaders that can be found, not the best that
can be found to work within an arbitrary compensation environment which
bears no relation to the job market in Ontario, Canada or
We believe that independent, voluntary hospital boards of directors are
best-positioned to recruit, retain and manage the performance of the
skilled and experienced individuals who lead Ontario's hospitals and
are responsible for approximately 20 percent of the tax dollars spent
by the Government of Ontario. They have the history and local context
necessary to make sound decisions regarding hospital leadership. This
proposal would remove one of the tools that all boards of directors use
when making those decisions. It would also make it extremely difficult
for the boards of directors of several hospitals - particularly the
large community and teaching hospitals, many of which have annual
budgets of $500 million or more - to recruit the kind of administrators
and medical or research leaders they need to remain the best in Canada.
Ontario's hospitals are the most efficient in Canada, and they
constantly strive to improve patient care; strong leadership is an
absolute necessity in today's environment, which features no increases
in operational funding, the implementation of a new funding formula,
and new transparency and accountability expectations. This proposal
would not strengthen that leadership.
If implemented, this proposal would be the fourth change Ontario legislators have made
to hospital executive compensation programs since March 2012, and the eighth since 2010. Some of these changes directly contradict and/or undermine other
changes. This indicates that very little, if any, thought has been
given by the Government of Ontario and legislators to how BPS
executives can be appropriately compensated in a way that combines the
needs of their organizations for strong leadership with the goals of
taxpayers within the context of a prolonged fiscal challenge. This is
demoralizing for current employees. It will also encourage those
considering a career in hospital administration to seek employment in
outside hospitals or BPS, where the terms of their employment aren't
subject to constant revision based on the whims or political
imperatives of legislators.
Ontario's hospitals have shown great leadership regarding executive
compensation reform. We are willing to work with others, as shown
earlier this year when we proposed a package of reforms which would
have created an evidence-based compensation framework, increased the
amount of executive compensation tied to provincially-articulated
outcomes, and frozen executive compensation for a total of 5 years.
This package of reforms would have generated significant savings while
maintaining hospitals' ability to recruit and retain the leaders they
Ontario's hospitals understand the need for fairness and restraint in
compensation. It should also be noted that, in June 2012, executive
compensation at hospitals was frozen by legislators until Ontario's
Budget is again balanced, which raises the questions of why this
proposal, which goes much further than a freeze, is fair or necessary.
For these reasons, we strongly encourage legislators to reject these
proposals, and ask them to begin approaching BPS compensation issues
with the thoughtfulness they deserve.
We are also disappointed that the Government of Ontario chose not to
move ahead with needed improvements to the Hospital Labour Disputes
Arbitration Act (HLDAA), which governs arbitration in the hospital
sector. As the OHA has noted on previous occasions, one of the biggest
risks hospitals face is from arbitrators making decisions about
collective agreements that do not reflect their ability to pay. The
Government of Ontario introduced proposed legislative amendments to
HLDAA in their 2012 Ontario Budget bill, Bill 55, but these proposed
amendments would likely have made adverse, costly decisions from
arbitrators more likely, not less. We call on the Government of Ontario
to finally and appropriately address this issue which, unlike today's
proposal, would have an immediate, noticeable and positive
effect supporting restraint in health system spending."
-- Pat Campbell, President & CEO, OHA
According to the 2010 Public Sector Salary Disclosure (PSSD), only 77 of
the 207,000 people employed by Ontario's hospitals reported
compensation levels (including benefits) above $418,000.
This group - which includes CEOs, senior managers, physician employees,
and other clinical staff - represents less than four one-hundredths of
one percent of the total number of hospital employees in Ontario.
Capping their compensation would save approximately $4.7 million per
year; this represented a total of less than three one-hundredths of one
percent of hospitals' total expenditures in 2010.
An analysis of the 2010 PSSD suggests that this cap, if applied to all
BPS employers (except hospitals and municipalities) would total
approximately $7.3 million.
These savings, when combined with the expected savings from the hospital
sector, would total approximately $12 million.
In 2011, 3 Ontario hospitals had budgets of over $1 billion; 7 hospitals
had budgets over $500 million; 15 hospitals had budgets over $400
million, and; 23 hospitals had budgets over $300 million.
SOURCE: Ontario Hospital Association
For further information:
OHA Public Affairs