On 7 November 2019, the Provincial Government passed the Protecting a Sustainable Public Sector for Future Generations Act, 2019 (commonly referred to as Bill 124). Bill 124 provides that the purpose of the Act is to “…ensure that increases in public sector compensation reflect the fiscal situation of the Province, are consistent with the principles of responsible fiscal management and protect the sustainability of public services.” The Act requires public sector employers to limit increases to salary (and all other elements of compensation) to 1% for each 12-month period during their 3-year moderation period.
Bill 124 does not apply to:
- Length of time in employment (seniority-based increases)
- Assessment of performance (merit-based programs)
- Employee’s successful completion of a program or course or professional or technical education
Bill 124 establishes a 3-year “moderation period” which imposes the following restrictions on salary and compensation increases:
- Salary rate increases limited to a maximum of 1% per 12-month period for any individual position or class of position;
- No collective agreement or arbitration award may provide for any incremental increases to existing compensation entitlements or for new compensation entitlements that in total equal more than 1% on average for all employees covered by the collective agreement for each 12- month period.
The moderation period for the University of Waterloo is from 1 May 2021 – 30 April 2024, inclusive. This is the reason that the salary scales are adjusted by 1% on each May 1 within this period as per the 3-year Faculty and Staff salary agreements, effective May 1, 2021.
What does this mean?
Any increases to salary cannot exceed 1% in a 12-month period unless they meet one of the exceptions listed above, regardless of the availability of funding or the source of funding (i.e., operating, research or external funds) and includes salary adjustments made at the time of contract/appointment initiation or renewal/extension.
Examples limited to 1% include:
- Contract renewal or extension in the same position
- New employment contract
- Title change
