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Doubts Cast on the Provincial Wage Freeze

Sunday, 7 October 2012 11:26

Freezing provincial wages is a hot topic, as thousands of Ontario workers are being threatened with a 2-year freeze on their salaries. But one Economist is casting some doubt on how effective that will be in the government's plan to reduce the deficit. Ontario has an 8-year plan to reduce spending and eliminate a 17-Billion dollar shortfall. That's a plan that TD Senior Economist Sonya Gulati says would be an epic feat. "The issue with the expenditure restraint and why it makes it so challenging, is because it's going to take place over 7 to 8 years. It's very difficult to restrain government spending, that amount over that extended period of time. We haven't seen it by any other province or the federal government in Canadian history, especially since the post-war era," said Gulati. Gulati says freezing wages is only a temporary relief, and that unions and workers will want a raise once the 2-year freeze is up. Also, she says health care spending is set to rise with the baby boomers moving into their senior years.

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