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Bill 124 back pay forced Ford government to overspend in 2023

Retroactive salary payments to education and health-care workers led to billions of dollars in overspending at Queen’s Park, according to the province’s financial watchdog, as the Ford government grapples with the price tag of its failed Bill 124.

The controversial wage-capping legislation was deemed to be unconstitutional by two successive Ontario courts, triggering billions of dollars in back pay being handed out to thousands of public sector employees.

While the Ford government initially attempted to keep the controversial legislation in place, Premier Doug Ford’s cabinet eventually agreed to repeal the legislation in its entirety.

Some unions have already renegotiated and received retroactive pay while others, including non-unionized workers, are still waiting for details on wage settlements.

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While Ontario’s Financial Accountability Officer (FAO) has pegged the overall cost of Bill 124 at $13.7 billion, the watchdog’s latest report shows a breakdown of the cost in two of the province’s largest employment sectors.

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The Ministry of Education received a $2.62-billion bump as of the third quarter — 12 per cent higher than planned — which the FAO said mostly went to school boards that employ teachers and education workers.

The Ministry of Health received a $1.5 billion increase as of this quarter — 2.8 per cent higher than planned — which the FAO said was earmarked for the operation of hospitals, home care, and community services that employ nurses and other health care workers.

The FAO’s report also shows the Ford government could be preparing for additional payments that have not yet been awarded.

The contingency fund, the government’s equivalent of a rainy day fund, has grown to $5 billion.

“We don’t know what the government intends to use it for,” said Financial Accountability Officer Jeffrey Novak.

The Ford government’s 2023-24 budget began with $4 billion in contingency funding and was forced to lean on the pool of cash through the fiscal year.

In the third quarter, the FAO notes, the government topped up the fund by $2.5 billion with little clarity about why the government needed the extra cash in contingency funding.

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