Ontario Teachers Sick Days: Government Wants To Limit Benefit After Being On The Hook For $1.7 Billion
TORONTO - Ontario can no longer afford to allow teachers to bank sick days and get a large payout on retirement and also needs to freeze their wages for two years, Education Minister Laurel Broten said Thursday.
Some school boards don't have the provision, but most teachers in Ontario can bank 20 sick days a year, up to 200 days over their career, and get paid a lump sum averaging $46,000 when they retire.
Teachers' sick days amount to a $1.7-billion liability and can't be sustained by a government facing a $16-billion deficit, said Broten.
"A cash-out of more than 200 days is not sustainable in the long term and not in line with the current fiscal reality we have in the province," she said.
"A sick day that a teacher might accumulate this year, at their salary in their first or second year of teaching, is paid out at the end of the career at the salary level they have at that instance."
Economist Don Drummond recommended the province lift its cap on class sizes and eliminate full-day kindergarten, which will cost $1.5 billion a year, ideas the Liberal government has already rejected, Premier Dalton McGuinty said Thursday in Thunder Bay.
"We can’t grow education funding at the same rate that we did in the past, but we do believe that we can protect the progress that we made," said McGuinty, the self-proclaimed "education premier."
"We can protect class sizes and full-day kindergarten, and we can also protect jobs, but it does require that we put in place the kind of salary freeze that we have proposed to teachers."
The government wants to limit teachers to six sick days a year and eliminate their ability to accumulate them and be paid out, although sick days that have already been banked will be protected.
Ontario teachers start at $41,766 to $44,292, and can make up to $92,813 in elementary schools and $94,942 in secondary schools, depending on years of service and education.
The government wants to freeze the grid so no one gets a raise because of seniority or improved credentials.
The Elementary Teachers' Federation of Ontario walked out of contract talks Wednesday, a week after they were first given details of the government's position.
"To say we were insulted is an understatement," said Sam Hammond, the federation's president.
"We find the tone and, most significantly, the content of the government’s parameters to be offensive to all ETFO members and cannot be a party to what amounts to deep and mean-spirited strips to our collective agreements," he said in a statement.
Hammond was not available to comment further on Thursday.
The Progressive Conservatives said they doubted the Liberals would have the backbone to actually freeze teachers' salaries, and said all one million public sector workers in Ontario should have their pay frozen for two years.
"We support a legislative wage freeze for everybody (in the public sector)," said Opposition education critic Lisa MacLeod.
"Mr. McGuinty’s not prepared to make that sacrifice and what we’re now seeing is negotiations through the media rather than at the table, and that’s going to be quite divisive."
The New Democrats also complained that the Liberals were negotiating with the teachers through the media, but wouldn't say if they thought the sick days provision should be eliminated.
"I can’t on the one hand criticize the government for bargaining through the media and then jump into that game myself," said NDP Leader Andrea Horwath.
"I think specifically because it is a tough round of bargaining that’s ahead of the teachers and the government that they should be doing it in a productive way, and by whipping things up in the media I don’t think is very positive."
Broten denied the government was negotiating through the media, and asked the teachers to remember all the improvements they've had in pay, preparation time and benefits under the Liberals as the negotiations go forward.
Contracts for teachers and school support staff expire Aug. 31, and the government is seeking only a two-year deal after going for four-year agreements in the last two sets of negotiations.
Also on HuffPost:
Big Canada Pension Plan Changes Coming In 2012
Ottawa is bringing in a raft of new or tweaked policies to reflect that retirement these days is more of a gradual transition for many people rather than a single event. Many of these changes either begin in 2012 or are entering the next phase-in period, and they'll have a direct impact on the retirement plans of Canadians. In some cases, the changes are big enough that people nearing retirement may want to have a chat with a financial adviser before deciding exactly when to apply for a CPP retirement pension. (Justin Sullivan/Getty Images) <em>With files from CBC</em>
1. Early CPP, Lower Benefits
The first change involves payment rates. People can choose to take a CPP retirement pension as early as age 60. But there's a catch: A 0.5 per cent reduction in the pension payout for each month before age 65 that someone begins receiving it. That translates into a retirement benefit that's 30 per cent less at age 60 that it would be if you waited until 65. Starting in 2012, Ottawa is beginning to phase in a bigger reduction to get that early access. For 2012, the penalty rises to 0.52 per cent per month -- or a 31.2 per cent reduction for someone who starts receiving their retirement pension at age 60. The early-bird reduction will continue to rise until 2016, when it hits 0.6 per cent per month, or a maximum 36 per cent reduction for those who start receiving CPP payments at age 60 rather than waiting until they reach 65. (Getty)
2. Later CPP, Bigger Benefits
Similarly, those who wait until after the age of 65 to start collection CPP will get a bigger increase in their retirement benefit. Before 2011, the rules stated that the CPP retirement benefit was boosted by 0.5 per cent for each month after age 65 that an individual put off receiving it. So someone who waited until age 70 would enjoy a 30 per cent boost in their payments. But starting in 2011, the government began to phase in a gradual increase to that delay bonus. For 2012, the increase for each month after 65 that a person delays applying for CPP goes to 0.64 per cent -- or a maximum increase of 38.4 per cent for those who start receiving a pension at age 70. By 2013, the maximum bonus moves to 42 per cent. These changes won't affect people who are already receiving CPP benefits. They are being made, according to Service Canada, to restore these adjustments to "actuarially fair levels," so there are "no unfair advantages or disadvantages to early or late take-up of CPP retirement benefits." (Getty)
3. Drop-Out Years Increase
Canadians currently don't need to contribute to the CPP every year from age 18 to age 65 to get a full CPP retirement pension. When someone's average earnings over their contributory period are calculated, 15 per cent of their lowest earning years are automatically ignored when the calculation is made. For someone who takes their CPP retirement pension at age 65, that means seven years of low or zero earnings are dropped from the equation. But starting in 2012, that "general drop-out provision," as it's called, goes up to 16 per cent. For someone eligible for CPP benefits in 2012, that will allow up to 7.5 years of the lowest earnings to be excluded from the calculations -- boosting the retirement benefit paid. In 2014, the percentage will rise again to 17 per cent, which will allow up to eight years of low earnings to be dropped. These changes can really benefit people who entered the workforce late, who were unemployed for a long time, or took time off to go back to school. One point to note is that there are separate drop-out provisions specifically for time spent out of the workforce because of disability or to have children. (Alamy)
4. 'Work Cessation Test' Dropped
CPP rules used to require that someone stop or drastically reduce the amount they earned during the two consecutive months before they began to receive a CPP retirement pension. This was, for many Canadians, an annoying and costly requirement -- especially since so many people now ease into retirement instead of stopping work completely. Now, that rule is history. Beginning in 2012, the "work cessation test" has been eliminated. (<a href="http://www.flickr.com/photos/misteraitch/" target="_hplink">Flickr: misteraitch</a>)
5. Post-Retirement Benefits
There's another rule change that's important for semi-retirees to be aware of. Before 2012, if someone started receiving a CPP retirement pension early -- say, at age 62 -- they didn't have to make any CPP contributions if they decided to collect payments but also keep working after age 62. Starting this year, if you are under age 65 and continue to work while also drawing a retirement pension, you and your employer must make CPP contributions. The good news for employees is that these extra contributions will be credited to what's called a Post-Retirement Benefit (PRB), which will result in a higher CPP retirement pension in the year after you make contributions to your PRB. This measure is a nod to the reality that many "retired" Canadians are still working. Canadians who continue working after age 65 and are receiving a retirement benefit will have the choice of whether or not they want to make CPP contributions. If they choose to make them, their employer must kick in their share too. Those additional contributions will go towards higher benefits beginning the year after the PRB contributions. (<a href="http://www.flickr.com/photos/elwillo/" target="_hplink">Flickr: Keith Williamson</a>)
6. Premiums And Benefits Rise
CPP benefits are always adjusted to reflect the rising cost of living. For 2012, the increase in benefits is 2.8 per cent. That will bring the maximum monthly CPP retirement pension to $986.67. Contribution rates are unchanged. But since the yearly earnings maximum that the rate applies to is going up, the maximum annual contribution will rise by about $89 in 2012 to $2,306.70 for both employees and employers. (<a href="http://www.flickr.com/photos/redvers/" target="_hplink">Flickr:R/DV/RS</a>)