By Ray Rivers
December 20, 2014
BURLINGTON, ON.
The federal government spends $43 billion (2011/12), which is about half of all direct program spending, on human resources. That averages out to an annual $115,000 salary for each of the 375,000 full time employees who make up your federal government.
Those salaries, according to the Parliamentary budget officer, have been growing at a faster rate than either the private or the provincial public sector, notwithstanding the federal government’s promised austerity program.
Workers in the Ontario Public Sector also do well, receiving higher pay and bigger raises than their private sector counterparts. This can be a bit of an unfair comparison, given the extensive breadth of private employment.
Still the difference is striking, with an average hourly pay rate of $34 for the public servant as opposed to $25 across the private sector. And, this gap has been widening over the years.
Nobody objects to value for money and most of us believe that a better educated employee should generate improved productivity. So part of the reason for the gap may be that Ontario public servants, on the whole, are much better educated than their private sector counterparts, with relatively twice as many holding university degrees (41% to 20%).
The Harris government introduced the ‘Sunshine List’ which identified those public servants earning over $100,000. Today that list includes almost 90.000 employees, having grown by 39% since 2009. While public sector incomes were once said to be pulled-up by the private sector it is evident that the reverse is true today. Generally one can assume that the public employee is as well or better paid than most equivalent jobs in the private sector, including many non-government senior executives.
So what about all those outrageous and improper executive expense claims? The 2015 Pan-Am games are an important economic event for this province and for Canada. There is a 17 member organizing committee, which will have been paid about $21 million of your hard-earned dollars by the time the games are on. The CEO, alone, pulls in over half a million a year.
In spite of what most people would consider generous compensation these characters have been submitting their personal expense claims as if they were understudying Mike Duffy and Pamela Wallin. Hundreds of airline flights over were made the last four years, including one to watch a wake-boarding championship in the Caymans . Three thousand dollars was paid for fourteen limo rides from the airport ($238 per trip)?
And why do we have to send this ‘high-priced help’ back to school to take courses in strategic planning and writing – at public expense? What were they thinking when they purchased over a thousand dollars worth of Harry Rosen dress shirts, ostensibly for team uniforms? There was a wine tasting, loads of lunches with alcoholic beverages, and don’t forget the overpriced orange juice. Though, caught squirming in the cookie jar, they eventually paid-back some of the claims, again taking a page out of the Duffy/Wallin playbook.
This expense claim business is not limited to the Pan-Am crowd. The Hamilton Spectator uncovered that our Hamilton-centered health executives (including Burlington) had racked up over $2 million dollars in expenses over the past seven years. Fully a quarter of these expenses were claimed by the top executives, including the CEO of Hamilton Health Sciences (HHS) who earns close to $700,000.
Corruption might be too strong a word but greed pretty well sums it up. We have been taught that money is the major motivator for an individual to perform; and that high salaries are the price we have to pay for good executive decision-making. Yet, we paid over a million dollars to the CEO of Hydro One whose organization was brutally criticized for incompetence by the provincial Auditor General in her latest report. So much for that theory!
So if paying big bucks to a CEO doesn’t guarantee a well run organization, what does it promote? Entitlement? I’d be very surprised if HHS couldn’t find someone else who could run that organization at least as well, for half the salary they’re now paying – much as Burlington’s Joseph Brant does.
Lofty titles, fat salary packages and lavish expense accounts might be very comforting to the recipients of these perks, but personal achievement, peer competition and helping the public likely play a much more important role in motivating public leaders and getting results. Mike Harris was on to a good thing in creating the ‘Sunshine List’ and it is unfortunate he didn’t go the extra step of capping all public service executive salaries, as the Province is rumoured to be considering today.
Yet, the truth is that Ontario’s public sector is already leaner than every other province in Canada. And the government actually has fewer public sector workers and spends less on them per capita than any other province. After all, being the most populous province in the union gives us the advantage of economies of scale.
But Ontario is in the process of fighting a massive deficit and combating an overbearing public debt. So while reducing senior executive salaries will not solve that problem on its own, it would be a good start. And better expenses management should be a no-brainer.
Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was a candidate for provincial office in Burlington where he ran against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province.
Background links:
Federal Employment Provincial Employment
Pan-Am Expenses More Pan-Am Expenses Still More Pan-Am Even More Pan-Am –
Sunshine List Average Earning by Province
Capping Exec Salaries Motivating Employees Capping Exec Salaries
Nice sellout Ray. Needed a little love, did you? What’s your next article – an expose on the Telcos? ;-}
An excellent column, Ray. Thank goodness you have surfaced the facts about a situation that everybody suspected existed. Why do we still believe in democracy when this arrogant avarice is condoned by those elected or appointed?
Greed is hardly the word. Egregious is how I would describe the politicians, ministers, directors, and trustees who have allowed this state of affairs.
Our mendacious elected and appointed representatives and their covetous bureaucrats all have their snouts in the same trough, treating with contempt the taxpayers who must continue to fill the trough.
The Sunshine List is manipulated to benefit of the high income public servant. I know of many who have their salaries dividend into two separate work categories. One salary is for making over $100K and the other job category makes just under $100K (so not reported). Their combined income is in fact significantly higher than the general population sees on the sunshine list.
This is just the tip of the iceberg.
In both the public and the private sectors, stakeholders have a right to expect ethical behaviour; i.e., people should not take what they are not entitled to just because their positions make it possible to do so.
In the private sector, enforcing limits on greed is the job of the board of directors, on behalf of the shareholders, and no one is generally accountable to the public, unless laws are broken.
In the public sector, we are all affected when we perceive misuse of our taxes and we expect our governments to prevent it. Public sector abuses are facilitated by our governments’ use of arm’s length “agencies”, which all have to have a hierarchy of expensive executives topped by a CEO. There are far too many of these agencies, IMO.
There is an old sooth: “You get what you deserve.”
We, Canadian Citizens, by and large, are not taking an active interest in politics and, therefore, in the way and by whom we are governed. Why do we expect to get any better?
We will not unless we integrate politis in our lives.
Where there are effective audit strategies, these excesses do not occur as the egregious claims are simply not reimbursed. So where do these disgraceful, self-indulgent behaviours exist? Exclusively, we see these examples at the executive and senior management levels whether at the public or private sector levels.
Recently it was revealed that Canada’s six largest banks have set aside $12.2 Billion for annual bonuses in 2014. Is this not the same or worse? I am sure that these Grinches will have a very greedy Christmas.
What is most frustrating is when they waste money on stupid programs. Some examples if you please.
1) Harper has Canada Revenue Agency auditing zero rated goods to review the classification that was used on entry to this country. To start – these goods were 1st exempt because they are a food item and 2nd exempt because it was made in the US. So just to be clear – there is no money owing to the Government no matter what the result of this audit. Correct, but a minor misclassification of this small amount of food could be ever so important to some stats Canada person somewhere we are told. Hog wash. This is just busy government work.
2) Ontario Govt has program to ensure that anyone with 20 employees or more can properly serve people with disabilities. Great goal, but must we legislate common sense customer service? So the Govt gets you to fill out a form and answer some questions. Seems they don’t have enough real questions to ask because some consultant suggested that 18 to 20 questions is about the correct size of a survey. But we only think up 8 questions the govt worker says. So, sitting around a table, one of the dead wood speaks up and suggests, lets ask the same questions a 2nd time, but just ask it in a different manner. Ya, that’s it.
So companies have to answer these stupid questions. Would you help a person in a wheel chair reach something on a high shelf? Of course, it’s common sense if you want to stay in business.
Anyway this goes on. Fill out survey and submit it. Months later get a letter from them stating I did not fill out the survey. I call – oh yes sir, I see you completed it in August of 2014. So why are you writing me a letter telling me the complete opposite? Anyway, long story – they are just grossly overpaid and incompetent.
These are just easy quick examples on how the Govt wastes our money with slow moving dead wood in these jobs. Frankly you could get the same effort at 1/2 the pay.
This is why the public bitches about Govt workers, because they all stive to lower the bar.
Thanks Ray
Re: “..high salaries are the price we have to pay for good executive decision-making…” – I doubt if there is any evidence to support that, but that’s what executives want us to believe, in spite of all the blunders and scandals that we read about regularly.
Would there not be any qualified applicants if the HHS CEO salary were (only) $400,000, instead of $700,000?
Ray,
I can’t believe you wrote this article! Did your name inadvertently get put under a conservative writer of this piece?
I could not have written it better.
For once, we are in agreement.
happy Holidays.
Bill