Mississauga, ON (March 11, 2013) - The provincial interest arbitration system is hurting Ontario's economic competitiveness, according to Mississauga Board of Trade (MBOT).
MBOT is calling on the provincial government to reform the arbitration system to ensure that arbitrators consider municipalities' capacity to pay in their decisions.
The interest arbitration system is the only legal process available to municipalities to settle contract negotiation disputes with essential municipal workers, such as police, firefighters and some paramedics.
Problematically, interest arbitration decisions give little consideration to local fiscal conditions. Instead, arbitrators tend to replicate agreements from other communities.
"This is problematic," says Sheldon Leiba, MBOT President & CEO. "Replicating the salary and benefits from Toronto, for example, to Thunder Bay, doesn't consider the differences in communities' capacity to pay."
Partially as a result of interest arbitration, emergency service costs are growing more quickly than the Consumer Price Index as well as the average of other public sector workers, including nurses and teachers. High interest arbitration awards mean municipalities are forced to either increase taxes and/or reduce services.
"Competitive tax rates and quality public services are key to economic development and prosperity, and will help Ontario return to fiscal balance," says Leiba. "Interest arbitration is hurting municipalities' economic competitiveness, and is ultimately hurting Ontario's competitiveness."
MBOT is urging the provincial government to modify the interest arbitration system by requiring arbitrators to provide, in a timely manner, clear assessments and rationale for their decisions. We are also urging the government to broaden the definition of the 'ability to pay' criteria used in interest arbitration decisions, to include economic and fiscal environment and productivity criteria.
Returning to fiscal balance is one of the priorities outlined in the Ontario Chamber of Commerce's five-year economic agenda for Ontario, Emerging Stronger 2013.
As the voice of business since 1976, Mississauga Board of Trade is a private-sector, not-for-profit business organization representing approximately 1,500 businesses, employing 65,000 people in Mississauga. MBOT is well positioned to meet the needs of business by using its considerable influence at all levels of government. As the forum for business, MBOT works together to influence public policy and promote a better understanding of the marketplace among policy makers, media and the general public.
President & CEO
Mississauga Board of Trade
905-273-6151 ext. 27