Ontario Bill 124 could cost government over $13B, FAO report suggests

The court’s decision to side with Ontario public sector workers on Bill 124 could cost the Doug Ford government over $13 billion.

According to a report by the province’s Financial Accountability Office (FAO) released Tuesday, the cost of remedies to workers affected between 2022 and 2028 will total about $13.7 billion.

Back in 2022, the FAO predicted the government would need to pay around $8 billion if the court challenge was successful.

“The FAO’s current spending forecast now assumes that all union and non-union public sector employees that were subjected to Bill 124 will receive wage increases to adjust for the impact of the legislation,” the report says.

“The Province has also recorded a $2.5 billion contingent liability in the 2022-23 Public Accounts of Ontario to recognize the potential impact of retroactive payments.”

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Ontario Premier Doug Ford said Tuesday his government will not be appealing the court’s decision as they have “already spent billions of dollars” as a result of the legislation.

Speaking to reporters at an unrelated news conference, the premier said he doesn’t believe the decision should have been made in the courts.

“We just believe it should be government’s decision,” he said.

“We say Parliament is supreme, meaning the people are supreme. People elect the Parliament. They should make the decisions.”

Ontario Premier Doug Ford greets members of the public following a press conference in Mississauga, Ont., Tuesday, February 13, 2024. THE CANADIAN PRESS/Christopher Katsarov

The Ontario government has said it will repeal the 2019 law that capped salary wages for public sector workers at one per cent for three years. This will occur when MPPs return to the legislature next week for its first session of 2024.

The law was widely criticized by labour unions and opposition parties, who argued it was unconstitutional.

The case was first heard in 2022, with Justice Markus Koehnen ruling that Bill 124 does infringe on the applicants’ rights to freedom of association and collective bargaining.

The province appealed the decision, arguing the law did not infringe on constitutional rights, and that it was meant to be an “exceptional and time limited” effort at reducing the deficit.

The Court of Appeal for Ontario dismissed the province’s appeal Monday.

While the case was being heard in court, the government has slowly been paying remedies to these workers, which include nurses and teachers, to make up for lost wages.

“We've already signed agreements with the nurses and a lot of the teachers unions,” the premier told reporters.

“And times are different now.”

Ford said the province’s finances are starting to balance out, and that his government has been “prudent fiscal managers.”

On Monday, Finance Minister Peter Bethlenfalvy projected Ontario will have a $4.5-billion deficit by the end of the fiscal year, which is $1.1 billion lower than what was projected.