OPTA Newsletter: Did You Know?

The Ontario Property Taxpayers Alliance (OPTA) newsletter is issued quarterly - January, April, July and October. In addition to these regular quarterly issues, we also send out, on an ad hoc basis, “Did You Know” issues.

“Did You Know” issues are intended to bring to your attention some of the major contributing factors to the high cost of Ontario’s municipal governments, and the inefficiencies involved. We also make suggestions on what you can do about it.

This issue of “Did You Know” addresses salaries, wages and benefits.

Fraser Institute Wage Study

A May 28, 2023 report by the Fraser Institute provides insight into the wage and total compensation GAP between Ontario public and private sector employees doing the same type work. Since 79% of homeowners are employed in the private sector, this information is pertinent, as it applies to Ontario’s municipalities.

Pension Findings

• 84% of municipal employees have defined benefit pensions (with a guaranteed payout at retirement), 10.5% have some form of pension (with no guaranteed payout at retirement) and 6.5% have no pension at all

• 9% of private sector workers have defined benefit pensions, 16.1% have some form of pension and 75% have no pension at all

  There’s something terribly wrong with this picture

Salaries, Wages and Benefits

• Municipal employee wages are 10.9% higher on average than private-sector wages for comparable work

• Private sector employer benefits range from 15% for small businesses to 30% for very large businesses with an overall average of about 20%

• Municipal benefits range from 27% to 35% depending on the municipality’s size and services provided. For example, Tiny Township benefits were 27.5% of base wage (2023) whereas Cambridge’s benefits (2023) were 35%

• Using 31% as the average ((27+35)/2) for Ontario municipal benefits we can conclude that municipal workers earned about 21% more in total compensation than private sector workers having comparable jobs (1.109*1.31/1.20).

• For example, a municipal worker earning $90,000 would make on average $117,900 with benefits - the private sector worker with a comparable job would earn just $81,155 and $97,386 with benefits

  Again there’s something terribly wrong with this picture

• Other Fraser Institute findings include:

  • Municipal workers retire 2.5 years earlier than private sector counterparts

  • Enjoy job security and take no job security risk in growing the economy

  • Take more personal time off each year (14 days versus 8.8 days)

Conclusion

Cambridge paid $98.9 million dollars in SWB to its employees in 2023 - $72.4 million in salaries and wages and $25.5 million or 35% in benefits.

The municipal vs private sector SWB gap is incredibly unfair to property taxpayers, and private sector workers in general. It’s an equity issue and municipal councillors should be much more involved and diligent when it comes to wage concessions.

It’s also a very inefficient use of our hard-earned property tax dollars. Ontario’s municipalities should hire from the general labour market and pay private sector-like wages rather than require municipal government experience, or hiring from other municipalities which only serves to drive their SWB’s even higher.

If Cambridge paid private sector-like wages in 2023 it would have saved its residential homeowners up to $7.11 million in property taxes.

If Cambridge paid private sector-like wages and benefits (SWB) in 2023 it would have saved its residential homeowners up to $17.2 million in property taxes.

The disproportionate taking of your hard-earned property tax dollars without facing any employment RISK is absolutely unacceptable. And it’s happening all across Ontario’s 444 municipalities.

What can you do about this inequity? Talk to, call, or write your MPP. Talk to your local ward councillor. Tell them that Enough is Enough!

About the Ontario Property Taxpayers Alliance

The Ontario Property Taxpayers Alliance (OPTA) Inc. is an association of Ontario residential property taxpayers. We have come together to demand that municipal governments be held accountable for the efficient and effective use of our hard-earned property tax dollars. We are a not for profit corporation. We work with municipal, regional, and provincial representatives advocating for changes leading to improved property tax affordability.

For more information please contact us at info@propertytaxpayer.ca or by phone at 519-716-1645. Thank you.

Donations to OPTA Appreciated

Please help if you can by making a donation of any amount, big or small. We receive no salary and pay many expenses out of pocket.

Go to the OPTA website www.propertytaxpayer.ca to make a donation via PayPal or Credit Card. Or etransfer to donate@propertytaxpayer.ca. Thank you