Social Contract (Ontario)

The Social Contract Act was a statute passed by the Legislative Assembly of Ontario in 1993 as part of an initiative by the provincial government to mitigate the negative impact of the early 1990s recession and reduce the provincial deficit. Austerity measures included a wage freeze and mandatory unpaid days of leave for qualifying government employees, as well as the establishment of a job security fund. Introduced under the government of Premier Bob Rae, the unpaid days of leave became known colloquially as Rae Days.

Overview

Background

During the early 1990s recession, Ontario faced an annual deficit of $12.4 billion in 1993. The government sought $2 billion in wage-concessions from public-sector workers to reduce the deficit. The social contract mandated that public-sector workers earning more than $30,000 take up to 12 unpaid days off a year.

Two of Ontario's largest unions, the Ontario Public Service Employees Union (OPSEU) and the Canadian Union of Public Employees (CUPE), initially boycotted the talks.. However, in May of 1993 they joined the tri-partite tables and worked to achieve Sector Agreements.

Provisions

To encourage employers, bargaining agents and employees to achieve savings through agreements at the sectoral and local levels primarily through adjustments in compensation arrangements.

To maximize the preservation of public sector jobs and services through improvements in productivity, including the elimination of waste and inefficiency.