Social Contract (Ontario)

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The Social Contract Act was a 1993 initiative of the provincial Ontario New Democratic Party government, intended to mitigate the negative impact of the early 1990s recession. The Act included the establishment of a job security fund, as well as austerity measures such as a wage freeze and mandatory unpaid days of leave for qualifying members of the civil service. The unpaid days of leave became known colloquially as Rae Days, after NDP leader Bob Rae, and are probably the best known aspect of the policy.

History[]

Ontario was deeply affected by the early 1990s recession, with a 1992-1993 annual deficit of $12.4 billion.[1]

The NDP was the party in charge during this period, which was led by Bob Rae. Rae asked for $2 billion in wage cuts within the civil service, and asked the public sector unions to work together with the government to implement the cuts. Two of Ontario's largest unions, the Ontario Public Service Employees Union (OPSEU) and the Canadian Union of Public Employees (CUPE), boycotted the talks.

Purposes of the Act[]

  1. To encourage employers, bargaining agents and employees to achieve savings through agreements at the sectoral and local levels primarily through adjustments in compensation arrangements.
  2. To maximize the preservation of public sector jobs and services through improvements in productivity, including the elimination of waste and inefficiency.
  3. To provide for expenditure reduction for a three-year period and to provide criteria and mechanisms for achieving the reductions.
  4. To provide for a job security fund.[2]

Terms[]

The initiative included up to twelve mandatory days of unpaid leave annually for civil service workers, including (but not limited to) teachers, nurses, and accountants. The measure excluded workers who earned less than $30,000 annually, or those whom a 4.6% decrease in wages would put them below that annual income.[3]

Aftermath[]

The Social Contract Act was ultimately successful in what it had intended to do; the government saved $1.95 billion,[3] and prevented public employee layoffs.[4]

The initiative was incredibly unpopular, however, and the labour-allied NDP lost a majority of its union support, including Buzz Hargrove and the Canadian Auto Workers union. Support for the provincial party fell to 6% and is thought to have negatively affected the federal NDP in the 1993 federal election. The provincial NDP was unable to recover its previous levels of support, and lost the 1995 Ontario general election. The Liberal Party was initially the main beneficiary of the opposition to the Social Contract, but, ultimately, the Progressive Conservatives won the election. In that campaign, the NDP was reduced from a majority to a third party, a position from which they were not able to recover from until the 2018 election, when it became the Official Opposition.

The Social Contract affected Rae during his 2006 run for leadership of the Liberal Party of Canada.

References[]

  1. ^ "Budgets 1993: Federal and Provincial Responses to Rising Deficits (BP367e)". publications.gc.ca. Retrieved 2021-05-12.
  2. ^ "The Social Contract Act, 1993". Government of Ontario.{{cite web}}: CS1 maint: url-status (link)
  3. ^ a b Richard J. Brennan (6 Nov 2009). "'No regrets' about days that bear his name, Rae says". Toronto Star. Retrieved 8 April 2011.
  4. ^ https://vancouversun.com/news/national/Liberals+does+gently+into+that+good+night/8165179/story.html[dead link]

External links[]

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