New Ontario Executive Compensation Freeze

October 4, 2018 | Greg Bush, Madeleine Dusseault

The Ontario government recently issued Regulation 406/18 under the Broader Public Sector Executive Compensation Act 2014 (the BPSECA), freezing compensation for executives and heads of certain public bodies who earn $100,000 or more.

The regulation implements a cap on salaries and other compensation for designated executives, as well limiting the total amount of performance-related pay these designated employers can dispense.

The designated employers include a range of Ontario public sector employers, including school boards, universities and colleges. Most of these employers were required to freeze salaries and compensation for designated executives as of August 13, 2018, forestalling the compensation plans previously approved under former Regulation 304/16, which for most school boards would have seen modest increases in salaries for senior administrators.  In accordance with the new regulation, these previously approved compensation plans are void where they are inconsistent with the freezes imposed under the new scheme.

The Ontario government will review Regulation 406/18 by June 2019, and will focus its review on the regulation’s effectiveness in furthering the purpose of the BPSECA.


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