The Social Contract was a 1993 initiative of the provincial Ontario New Democratic Party government of Bob Rae to impose austerity measures on civil service. The plan imposed a wage freeze and mandatory unpaid days of leave for civil servants, which became known as Rae Days.
Contents
History
Ontario in the 1990s was in the worst economic recession since the Great Depression, with a 1993 deficit of $12 billion annually.
Rae requested $2 billion in wage cuts within the civil service, and asked the public sector unions to work together with the government to implement the cuts. When Ontario's two largest unions, the Ontario Public Service Employees Union (OPSEU) and the Canadian Union of Public Employees (CUPE), both boycotted the talks, the government decided to enact the initiative unilaterally.
The Social Contract
The initiative was mainly based around a forced twelve days of unpaid leave for all civil service workers, including (but not limited to) teachers, nurses, and accountants. The unpaid days off quickly became known as Rae Days and are probably the best known aspect of the policy. The measure excluded workers who earned less than $30,000 annually.
The Social Contract also re-opened collective bargaining agreements of all public unions, and froze the wages of all civil workers.
Results
The Rae Days were successful in their original aims. The government saved $1.95 billion, and prevented public employee layoffs.
The initiative was incredibly unpopular, however, and the labour-allied NDP lost a majority of its union support, including Buzz Hargrove and the Canadian Auto Workers Union. Support for the provincial party fell to 6 per cent and contributed greatly to the decimation of the federal NDP in the 1993 federal election. The provincial NDP never recovered their past support by the time the 1995 election came around; the Liberal Party was initially the main beneficiary of the opposition to the Social Contract, but, ultimately, it was the Progressive Conservatives that won the election. In that campaign, the NDP was reduced from a majority to a third party, a position from which, as of the 2014 election, they have not been able to recover.
The Social Contract affected Rae during his 2006 run for leadership of the Liberal Party of Canada.