What the Ontario Budget Means for Government Funded Employers

On April 11, 2019, the government of Ontario presented its first budget, Protecting What Matters Most. In its plan, the government laid out its top four priorities for the province: balancing the budget, health care and education, affordability and convenience for Ontarians and lowering the costs of business.  Included in these priorities are a number of changes that will affect all employers, as well as subtle hints as to what the future holds for government funded employers in the social services and developmental services sectors.

  1. Changes Impacting Employers Generally

The last two years have seen sweeping changes to Ontario’s labour and employment law landscape. In November 2017, Bill 148, the Fair Workplaces, Better Jobs Act swung the pendulum decidedly in favour of unions and employees.  A year later, in November 2018, the PC government swung the pendulum in the other direction in favour of employers with the passage of Bill 47, the Making Ontario Open For Business Act.  More recently, on April 3, 2019, the government passed Bill 66, the Restoring Ontario’s Competitiveness Act, which significantly erodes government oversight over hours of work and overtime entitlements for employees by eliminating the need for Director of Employment Standards approval for overtime averaging and excess hours of work agreements.

Employer Oversight and Regulation:

In keeping with the theme of “Open for Business”, the Budget further prioritizes employers, including plans to “modernize and streamline compliance with the Employment Standards Act,[1]” (ESA) with the use of “automated digital tools” to help employers educate themselves on understanding their obligations. In March 2019, the Ministry of Labour launched a self-audit digital tool to assist employers audit their compliance with the ESA. The tool, which has been rolled out to all Employment Standards Officers across the province, will allow employers to access an online portal through a link sent by the Ministry, where information may be submitted related to payroll, audit results and compliance. (The tool is not currently available online.)  While the tool will not completely replace in-person inspections or claims investigations, it will allow employers to better comply with employment standards without the need for paper audits. With the introduction of digital tools, the government intends to make employers more self-reliant and self-regulating.  This is consistent with the Ministry’s decision to freeze the hiring of employment standards enforcement officers and put a hold on any new proactive inspections of employment standards.

Increased Pension Coverage:

The government will expand target benefit pension plans to the not-for-profit sector. Target benefit pension plans combine the defined benefit and defined contribution pension plan models, allowing for a monthly income stream in retirement. The proposed legislative changes to the Pension Benefits Act would expand eligibility for multi-employer pension plans to include unionized and non-unionized workers in the not-for-profit sector. Until now, pension plans of charities and not-for-profits had been treated differently.

  1. Implications for Government Funded Social Services and Developmental Services

This budget was a clear statement of this government’s priorities.  Out of the budget’s 382 pages, the word “disability” appears only 10 times, and “developmental services” only once.  While programming for children with disabilities and autism did receive some attention, adult services were all but absent. In particular, no information was provided as to whether sustainability funding granted by the Liberals in their pre-election budget in 2018 will be annualized as intended, nor whether any other cuts to funding are planned.  As we are already well into the first month of the fiscal year 2019-2020, the precarity of supports and the developmental services system as a whole is being felt province-wide.

Finding Efficiencies and Streamlining Transfer Payment Processes

Here’s what we know: Consistent with the messaging of the Ernst & Young Line-by-Line Review, the budget indicates that the government will target “efficiencies” in the children’s and social services sector through the integration of human service programs, streamlining of transfer payment processes, transformation of services to increase choice for individuals and families and evidence-based sector transformation, including developmental services, “special needs” and early intervention programs.  While the implications of these proposed changes are far from clear, given recent reforms in autism services and health, we expect that this may signal increased pressure for mergers, amalgamations and administrative services sharing for efficiencies, as well as changes for agencies acting as eligibility and assessment gateways for services and funding, such as Developmental Services Ontario (DSO) agencies.

Increased Focus on Direct Funding

The buzz words of “increased choice” and “streamlining transfer payments,” together with the recent changes in autism services, may also signal an increased focus on direct funding.

For people and families, the move towards direct funding could mean an increased likelihood of paying for private supports in the future and potentially becoming the “employer” of a private support worker.  Learn more about paying private workers here.

For direct service agencies that have previously relied on annualized base funding, this is further indication that a fee-for-service based offering will continue to be an important avenue for ensuring long term sustainability.  Fee-for-service arrangements typically require increased flexibility in staffing on evenings and weekends, as well as a departure from typical fixed schedules to which full-time and even part-time staff may be accustomed, or to which staff may have a right under collective agreements in unionized environments.

Direct funding also means an increased likelihood of competition for services in the community, and potentially from an agency’s own employees.  Since the introduction of Passport Funding more than 10 years ago, PooranLaw has been working with agencies and families to develop frameworks for the brokering of funds and the engagement of workers. Issues affecting families and agencies alike include the appropriate characterization of private workers, agency workers moonlighting privately with families, conflicts of interest, and ensuring healthy and safe support relationships for all stakeholders. Clear policies and service agreements are important tools for preventing disputes with staff, people supported, their families and other stakeholders.

For more information on how the budget and anticipated changes to law and government policy may impact your organization, please contact Cheryl Wiles Pooran at cwpooran@pooranlaw.com

A full text of the budget may be accessed here.

[1] Employment Standards Act, 2000, S.O. 2000, c. 41