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CTV News
6 days ago
- Business
- CTV News
Ottawa mayor opposes pay hike for councillors amid talk of raise proposals
Ottawa Mayor Mark Sutcliffe says he won't back pay raises for city councillors as some members of council mull bringing forward a motion to give them a significant salary increase. CTV News Ottawa has learned councillors are considering several options for pay raises, where proposals could go up as high as $18,000, from $119,654 currently to $138,000 – a 15 per cent increase. Speaking in a media availability following the meeting, Sutcliffe said that while he respects the hard work of councillors, it would not be appropriate to consider a pay raise at this time. 'I think we need to take a look around at what's going on in the community right now. There's an affordability crisis, there's the prospect of significant federal job reductions, there are lineups at food banks,' Sutcliffe said. 'I hear all the time from my colleagues on city council and from members of the community that they want to see more resources being invested in critical areas to support the most vulnerable.' Sutcliffe added that considerations about a pay raise could impact ongoing salary negotiations with public sector unions representing city staff. 'I think it would be imposing a significant burden on the staff who are negotiating those contracts with those unions if we were to introduce for ourselves a larger than cost of living increase for our salaries,' he said. Ottawa's 24 city councillors each earned $119,490 in 2024 and $111,111 in 2023. Elected officials received a 2.5 per cent raise in each year of the three-year collective agreement for 2023, 2024 and 2025, tied to raises for non-unionized managers. In January, councillors received a report conducted by consulting firm MNP that found the current renumeration rates for elected officials in Ottawa aligned with the median market rate. 'Therefore, data-driven results across comparators' research do not indicate that a salary increase is needed presently,' the report said. Toronto councillors voted in March to increase their salaries by 24 per cent from $137,537 to $170,588. The Ford government unfroze Ontario MPP salaries held at 116,500 since 2009 last spring. MPPs saw a nearly $41,000 raise to a total of $157,350. Coun. Riley Brockington tells CTV News Ottawa he believes an independent assessment should be done to come up with the right figure. Brockington says outside of inflationary increases, councillors have not had an in-depth review on pay raises for members in over two decades. 'I've met with the mayor on a number of occasions. I floated six, seven different options for us to consider, while talking about the pros and cons of each,' he said. 'I just want something that is reasonable, that is backed up by an independent study.' Brockington says there are different opinions on council for the process moving forward. 'The timing is also a concern but at the end of the day, what we really need is a process that council agrees with so that this does not come up every term of office for city councillors and council as a whole to deal with,' he said. No motion on councillor pay was put forward at Wednesday's city council meeting and it's unclear if or when one will be. with files from CTV News Ottawa's Josh Pringle
Telegraph
25-05-2025
- Business
- Telegraph
Bond markets are in open revolt. A global reckoning is coming
When Rachel Reeves announced that she was axing the winter fuel allowance for all but the poorest pensioners, it was meant to send a clear signal to markets. Here is a chancellor, she was in effect saying, who is prepared to do really unpopular things in order to put the public finances back on a sustainable footing, and give investors the confidence they need to invest in UK plc. In the event, this act of political self-sacrifice turned out to be no more than a smokescreen. A revenue-raising Budget that takes the tax burden to a post-war record and a smattering of make-believe spending cuts have all been to no avail; Britain's fiscal predicament is continuing to deteriorate. This cannot have surprised anyone, because despite the pretence of fiscal responsibility, the Government keeps on granting public sector unions bumper pay awards. It happened last year and it's happening again this year, with pay offers which are considerably in excess of what's been budgeted for. There are also a multitude of other uses the Government keeps finding for your money. In any case, if the Chancellor cannot even hold the fort on the winter fuel payment – a relatively trivial saving, which against the great leviathan of state spending barely registers – what hope for anything more meaningful? Faced with a drubbing in recent local elections, in which the winter fuel allowance figured prominently as a source of doorstep complaint, the Government has folded like a pack of cards. It ought to be a resigning matter, but Labour's majority is so large that there is almost no climbdown that the Chancellor cannot perform without carrying on regardless. The debacle of the winter fuel allowance demonstrates anew that once an entitlement has been granted, it is almost impossible to remove. This is not a peculiarly British thing; it's much the same in virtually all economies where the demands of the welfare state have come to dominate mainstream political thinking. What's so worrying about this inability to confront harsh realities is that we are, absent of evasive action, only at the start of the long march towards even higher levels of welfare spending. Across the Western world, ageing populations – with a falling birth rate and baby boomers moving through to retirement – are putting downward pressure on revenues and upward pressure on spending. Analysis by the Office for Budget Responsibility suggests that based on policy settings as of March 2024, public spending in the UK over the next 50 years would rise from 45pc to 60pc of GDP, but that tax revenues would remain static at 40pc. As a result, public debt would rise rapidly from the late 2030s onwards to 274pc of GDP by 2075. With relatively short electoral cycles to contend with, governments around the world show little or no appetite to confront these pressures. A favourite Keynesian saying is that we should look after the present, and the future will take care of itself. Would that it were so easy: for many of today's political leaders, the threat of future insolvency is fast becoming today's problem to address. The canary in the coal mine was the debacle of the Liz Truss mini-Budget, when bond markets went on strike over a planned programme of unfunded tax cuts, forcing an abrupt about-turn in policy. The past week has seen further bond market rebellions, this time affecting the US and Japan. In Japan, yields surged after a government bond auction fell short, in part because the Bank of Japan is trying to scale back the support it has been giving to the market through quantitative easing. Those money-printing programmes – applied across virtually all advanced economies – have provided a steady source of demand for burgeoning government debt issuance, which would otherwise have struggled to find buyers. But now it's going into reverse. Even in Japan, one time land of the negative interest rate, investors are finding that the central bank is no longer prepared to provide past levels of support. Across the board, the supply of debt is beginning to outstrip demand. Similarly in the US, where bond markets are increasingly 'yippy', to use Donald Trump's description, following a credit downgrade and the passage through Congress of a hugely expansionary budget. Trump's sudden re-escalation late last week in his tariff wars has ironically brought some respite, with US Treasuries rediscovering some of their safe haven attributes. But it is unlikely to be any more than temporary. Why would you want to invest in a country that has launched a trade war against some of its closest allies? Still less one that through its 'one big, beautiful' tax bill threatens to perpetuate today's 6.5pc budget deficit into the indefinite future? Almost nowhere is there any sign of governments confronting the scale of the fiscal challenge they face. With rising market interest rates come higher debt servicing costs, further eating into any space governments might have for spending commitments. Particularly vulnerable to market jitters are countries where public debt is already at or above 100pc of GDP and where ongoing budget deficits are higher than that needed to stabilise debt at current levels. In no particular order, these countries are Japan, the US, the UK, France and Italy. All have suffered varying degrees of bond market turbulence in recent times. It's true that a 30-year bond issued last week by the UK Debt Management Office was hugely oversubscribed, but there is a price for everything, and at 5.4pc it was a particularly high one. Bond investors are already charging British taxpayers an arm and a leg for their money. If you believe the Bank of England is serious about returning the inflation rate to the mandated 2pc and holding it there, then yields like these are a steal. But they also tell us something new and alarming, which is that longer-dated G7 government debt is no longer regarded as 'risk-free'. With mounting doubts over whether governments are capable of honouring their obligations, significant risk premiums are creeping into its price, particularly with longer-dated maturities thought most at risk of some form of default. Nobody seems to have any answers, least of all the insurgent populist parties now making headway across large swathes of Continental Europe. Voter disillusionment with the political mainstream makes fertile territory for their all things to all men messaging. But by promising the earth, they threaten only further disappointment and division. Back in Britain, Angela Rayner, the Deputy Prime Minister, urges her colleagues to further increase taxes rather than risk the wrath of voters with more spending cuts. It's all just fiddling while Rome burns. If something cannot go on for ever, it will stop, said Herb Stein, Richard Nixon's economic adviser. A giant fiscal reckoning –global in nature – is fast approaching. The question is not if, but when the storm finally breaks.
New York Times
17-05-2025
- Business
- New York Times
New Jersey Can Show How to Take On Public Sector Strikes
Democrats have long blanched when public-sector unions threaten to strike and hold the economy for ransom. But with New Jersey Transit train engineers walking off the job on Friday, Gov. Phil Murphy can show the nation how blue states can resist that threat. Don't panic, just say, 'Let them strike,' and demonstrate resilience. With New York's help, New Jersey can reduce the impact of the strike. New Jersey starts with an advantage: As of 2024, nearly three-quarters of New Jersey Transit's weekday trips were on buses and light rail, which continue to operate. Most commuters who travel into Manhattan from New Jersey arrive on a bus and New Jersey is adding bus service to mitigate the strike's impact. A private bus company, Boxcar, is also giving customers more options. Governor Murphy should also push car-pooling, with the help of Gov. Kathy Hochul of New York, who could implement a two- or three-passenger minimum for vehicles entering Lower and Midtown Manhattan from New Jersey if traffic grows too heavy. New York's four-and-a-half-month-old congestion-pricing program is already a good reason for workers to car pool and save money. Governor Hochul should resist calls to suspend the congestion charge during the strike. Transit worker walkouts can have devastating consequences for the area economy. In 1966, the Transport Workers Union's 12-day strike against subways cost New York more than half a billion dollars ($5 billion in today's dollars) in lost wages and business. The strike transformed the brand-new administration of Mayor John V. Lindsay from fresh to exhausted. The political terror of transit strikes levies long-term costs. For decades, elected officials have allowed various unions to use the threat of a strike to protect pay and work practices that perennially push up the cost of providing transit. In 1994, Gov. Mario Cuomo settled a Long Island Rail Road strike by ending any prospect of work-rule changes, even though work rules reward inefficiency and push up overtime costs. Two decades later, his son, Gov. Andrew Cuomo, largely gave in to labor after the Metropolitan Transportation Authority spent weeks planning for an L.I.R.R. walkout. New Jersey Transit's engineers have rejected retroactive raises that the agency's executives say would increase average pay to $173,200 in 2028, from $135,400 in 2020. That nearly 28 percent growth in wages would track inflation as long as inflation steadies in the next three years. But the union demands pay parity with engineers in New York, including at the L.I.R.R. There is no reason New Jersey should offer identical railroad pay to what New York does and lock itself into New York-level tax increases to support commuter rail. Governor Hochul has just signed into law a $1.4 billion payroll-tax increase on downstate businesses to attempt to keep up with the M.T.A.'s ever-growing deficits, a tax on jobs, even as the city has had a slow post-Covid recovery compared to the nation. Murphy's most powerful tool is one that didn't exist during previous transit strikes: the ability of many workers to work from home. No, the goal isn't a return to a 2020 lockdown. But a commuter who regularly comes to Manhattan three days a week could cut down to two, and car pool on those two days, lessening traffic strain. Transforming a disaster into an inconvenience reduces the railroad union's power to strike. The same strategy and tactics could apply to future threatened strikes: What works for New Jersey Transit could work for the L.I.R.R. Even in New York City, with more people regularly bicycling to work, and, perhaps, with a state initiative to preregister interested people online for a ride-matching service in case of transit emergency, a future subway and bus strike would have less power to harm. Other public-sector unions will be watching — and so will national voters skeptical of Democratic politicians' ability to govern. The goal in withstanding a strike isn't to destroy public-sector union power, but to demonstrate that union power doesn't have the power to destroy the economy. Two sides can't negotiate fairly if one side can hold the other hostage.
