The last post presented an overview of what for lack of a better term can best be described as higher tier municipal employment in northern Ontario – that is individuals in the five major municipalities of northern Ontario who earned $100,000 or more in annual salary (let's call them Listers) thus placing them on the public sector salary disclosure list. What was interesting in the overview was that Thunder Bay in 2021 had the most municipal Listers at 547 followed by Sudbury at 540, then the Sault at 246, North Bay at 187 and finally Timmins at 142. This ranking roughly parallels population size with the exception that based on population, one would expect Sudbury to exceed Thunder Bay. The per capita cost of municipal employees on the public sector salary disclosure list was also the highest in Thunder Bay of the five cities. As a result, a more detailed look at trends for Thunder Bay is of interest.
Figure 1 plots the number of Thunder Bay municipal employees earning $100,000 or more
over the period 2017 to 2021 and shows that the number was relatively stable
over the 2017 to 2019 period but took a large leap in 2020 (to 558 from 452) and has remained at
approximately the same level (at 547 in 2021). The
percentage increase in the number of employees over $100,000 in 2020 was
approximately 24 percent and at the time was attributed to a large number of
employees in protective and emergency services who had been just under the
threshold for a number of years going over.
However, this is only part of the story as the increase in the total
wage and salary bill of municipal Listers (see Figure 2) in Thunder Bay from 2019 to 2020 was nearly
30 percent. That is the salary bill for
those on the list increased more than
the number of employees on the list
suggesting compensation increases drove a portion of the increase. And indeed, compensation particularly of higher tier administration and management was an issue last year with some increases approaching 12 percent. This could be seen as particularly annoying by others in the broader public sector - particularly front line workers in health and education - who were limited to one percent annually by Bill 124 while the municipalities were exempt.
Depending on what you think is the total municipal employment of the City of Thunder Bay, those making over the list probably make up anywhere from one-fifth to one-third of the City’s municipal employment though given the absence of readily accessible municipal employment numbers, these are estimates at best. One thing that does not need to be estimated however is the ratio of the total wage and salary bill of Thunder Bay municipal employees earning $100,000 plus to the total value of the tax levy as illustrated in Figure 3. Between 2017 and 2019, this share averaged 27 percent but in 2020 it took a leap to 36 percent and then declined to about 34 percent in 2021. In any event, one could make the case that the value of the wage and salary bill accounted for by those Thunder Bay municipal employees earning $100,000 plus represents over one third of the tax levy.
Figures 4 and 5 round out the analysis by presenting first the average salary of Thunder Bay municipal employees on the List and then the per capita cost of these employees. Again, 2020 – the pandemic year – is the crucial point in time. In 2020, the average salary per List member rose just over 5 percent - going from $121,002 to $127,091. Meanwhile, the per capita cost of those on the municipal salary list rose from $494 to $640 – an increase of nearly 30 percent. Between 2019 and 2020, the number of municipal Listers grew from 452 to 558 (24 percent) while their salary bill went from $54.7 million to $70.9 million (30 percent increase). Thus the average salary rose by about the difference. However, when you spread that salary bill across the entire population of the municipality you get a somewhat different result - salaries rose 30 percent but population growth was flat.
The List get a lot of attention every year. While accountability is important, it remains that the real accountability measure is not how much is being paid out but the value received for that money as well as its sustainability over the longer term. It is not that people on the list are making too much given what they may or may not do or that their salaries rose too much or even that there are a lot more of them. In the end, you do get what you pay for even in the public sector. The real issue is that the cost of services has grown dramatically but the tax base and population of Thunder Bay have not. Thunder Bay’s official population has stayed flat at about 110,000 people over the period 2017 to 2021, the value of the tax levy grew from $184 million to $204 million – an increase of 11 percent but the wage and salary bill of its municipal list employees has grown from $50.1 to $69.6 million dollars – an increase of nearly 40 percent.
No one is saying that those employees are not worth what
they are being paid or are not deserving of their pay especially given the
travails of the pandemic. However,
ultimately the money does have to come
from somewhere and to date the solution has simply been to pass the bill onto municipal ratepayers - something that was aided by the Ontario government under the provisions of Bill 124 which exempted municipalities because they had "own source revenues" - that is a municipal tax base. It would appear a number of fiscal and budgetary chickens are coming home to roost.