Toronto police budget rises above $1-billion; pay keeps outpacing inflation

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In what has become an annual ritual, Toronto's police board has approved a budget increase following deliberations that largely ignored the major driver behind ballooning police costs.

Over the past decade and a half, police pay has grown at a rate double that of inflation – a pace common to the rest of Ontario that critics attribute to a broken arbitration system.

A Globe and Mail analysis has found that Toronto police have been relatively successful at restructuring operations, but their efforts have done little to slay a billion-dollar budget that dedicates 90 cents of every dollar spent to a salary and benefits package over which top brass has no control.

The $1.006-billion budget approved Thursday is up 2.76 per cent from last year and up about 35 per cent from a decade ago.

What's preventing Toronto from tamping down police compensation, which sees a first-class constable earning $92,433 this year?

Government negotiators point to a flawed system that determines contracts while rarely considering the limits of cash-strapped municipalities.

"Arbitration looms over negotiations in a huge way," said former Toronto Police Services board chair Alok Mukherjee.

As an essential service, police are barred from striking.

If talks are stalled, provincial arbitrators step in to enforce an agreement.

But arbitrators tend to see public spending differently than mayors, assuming cities can simply hike property tax, said Jeff Lehman, the mayor of Barrie and the chair of the Large Urban Mayor's Caucus of Ontario.

That's why police salaries across Ontario have spiralled upwards, outpacing other public-sector raises by 19 per cent between 2005 and 2010, Mr. Lehman said.

"No offence to arbitrators, but that's why I'm elected," he said. "We have a system, a democratic system, where elected officials have responsibility for public spending."

Data analyzed by The Globe show that Toronto has made better-than-average progress in reforming its operations over the last decade, turning over more police duties to lower-paid civilian workers than any other major city.

The last time the Toronto board took talks to arbitration, in 2008, it came away shouldered with a lofty 10.3-per-cent wage increase over three years. "So why would I ever go to arbitration again?" Mr. Mukherjee said.

Arbitrators tend not to use other public-sector wages as a model when setting police pay, said Joy Hulton, a lawyer for York Region. Instead, they simply look at police in other jurisdictions, whose rates have also been driven up by previous police deals.

Increasingly, arbitrators have explicitly said that the "ability to pay" criteria doesn't factor into their decisions, though legislation instructs them to consider it, Ms. Hulton said.

Municipalities' claims that they can't afford large essential-services raises don't always "find strong favour" with interest arbitrators, said Michael Lynk, a professor of labour law at the University of Western Ontario.

However, arbitrators are also under pressure to mimic previous contracts, he said. There are only about 25 to 40 professionals in Ontario who handle these kinds of negotiations, and they are hired by the agreement of both parties.

"To continue to work, you've got to make sure that no one's particularly unhappy with you, or if they are, that they're equally unhappy with you," Prof. Lynk said.

For those who do things differently, the career consequences are obvious, Ms. Hulton said. "The few decisions that have applied the ability to pay … those arbitrators rarely get work," she said.

The big-city mayors are lobbying for several legislative reforms, including specific instructions on how arbitrators should assess ability to pay.

The province should also consider whether arbitrators could be assigned by an independent body rather than hired by the bargaining partners, Ms. Hulton said.

In some other provinces, independent bodies similar to the Ontario Labour Relations Board handle this.

In a statement, the Ministry of Labour said the law requires arbitrators to consider the employer's ability to pay, comparable work among public and private sectors and several other factors.

Reforming the system is on the ministry's agenda, and a nearly ready document will help begin consultations with the Association of Municipalities of Ontario and first responders.

Mike McCormack, president of Toronto's police union, dismisses the criticisms of police arbitration.

"They can always hide behind the arbitration system, but unlike fire services, we don' rely heavily on arbitration," he said. "The police act says the arbitrator must consider the employer's ability to pay, the economic situation of the municipality and the welfare of the community."