The ''Social Contract Act'' was a statute passed by the

Legislative Assembly of Ontario The Legislative Assembly of Ontario (OLA, french: Assemblée législative de l'Ontario) is the legislative chamber of the Canadian province of Ontario. Its elected members are known as Members of Provincial Parliament (MPPs). Bills passed by ...

in 1993 as part of an initiative by the provincial government to mitigate the negative impact of the

early 1990s recession The early 1990s recession describes the period of economic downturn affecting much of the Western world in the early 1990s. The impacts of the recession contributed in part to the 1992 U.S. presidential election victory of Bill Clinton over incu ...

and reduce the provincial deficit.

Austerity Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spend ...

measures included a

wage freeze Incomes policies in economics are economy-wide wage and price controls, most commonly instituted as a response to inflation, and usually seeking to establish wages and prices below free market level. Incomes policies have often been resorted t ...

and mandatory unpaid days of leave for qualifying government employees, as well as the establishment of a job security fund. Introduced under the government of

Premier Premier is a title for the head of government in central governments, state governments and local governments of some countries. A second in command to a premier is designated as a deputy premier. A premier will normally be a head of governm ...

Bob Rae Robert Keith Rae (born August 2, 1948) is a Canadian diplomat and former politician who is the current Canadian Ambassador to the United Nations since 2020. He previously served as the 21st premier of Ontario from 1990 to 1995, leader of the ...

, the unpaid days of leave became known colloquially as Rae Days.

Overview

Background

During the

, Ontario faced an annual deficit of $12.4 billion in 1993. The government sought $2 billion in wage-concessions from public-sector workers to reduce the deficit. The social contract mandated that public-sector workers earning more than $30,000 take up to 12 unpaid days off a year. Two of Ontario's largest unions, the

Ontario Public Service Employees Union The Ontario Public Service Employees Union (OPSEU; french: Syndicat des employés de la fonction publique de l'Ontario EFPOlink=no) is a trade union representing public sector employees in the province of Ontario, Canada. It claims a membership ...

(OPSEU) and the

Canadian Union of Public Employees The Canadian Union of Public Employees (CUPE; french: Syndicat canadien de la fonction publique, links=no; french: SCFP, link=, label=none) is a Canadian trade union serving the public sector – although it has in recent years organized workpl ...

(CUPE), boycotted the talks.

Provisions

# To encourage employers, bargaining agents and employees to achieve savings through agreements at the sectoral and local levels primarily through adjustments in compensation arrangements. # To maximize the preservation of public sector jobs and services through improvements in productivity, including the elimination of waste and inefficiency. # To provide for expenditure reduction for a three-year period and to provide criteria and mechanisms for achieving the reductions. # To provide for a job security fund.

Terms

The initiative included up to twelve mandatory days of unpaid leave annually for civil service workers, including (but not limited to)

teacher A teacher, also called a schoolteacher or formally an educator, is a person who helps students to acquire knowledge, competence, or virtue, via the practice of teaching. ''Informally'' the role of teacher may be taken on by anyone (e.g. whe ...

nurse Nursing is a profession within the health care sector focused on the care of individuals, families, and communities so they may attain, maintain, or recover optimal health and quality of life. Nurses may be differentiated from other health c ...

s, and

accountant An accountant is a practitioner of accounting or accountancy. Accountants who have demonstrated competency through their professional associations' certification exams are certified to use titles such as Chartered Accountant, Chartered Certifi ...

s. The measure excluded workers who earned less than $30,000 annually, or those whom a 4.6% decrease in wages would put them below that annual income.

Aftermath

Results

The ''Social Contract Act'' was ultimately successful in what it had intended to do; the government saved $1.95 billion, and prevented public employee layoffs.https://vancouversun.com/news/national/Liberals+does+gently+into+that+good+night/8165179/story.html

Political effects

The initiative was incredibly unpopular, however, and the labour-allied NDP lost a majority of its union support, including

Buzz Hargrove Basil Eldon "Buzz" Hargrove, (born March 8, 1944) is a Canadian labour leader and the former National President of the Canadian Auto Workers. He is currently serving as a Distinguished Visiting Professor at Toronto Metropolitan University's Ted R ...

and the

Canadian Auto Workers The Canadian Auto Workers (CAW; formally the National Automobile, Aerospace, Transportation and General Workers Union of Canada) was one of Canada's largest and highest profile labour unions. In 2013, it merged with the Communications, Energy and ...

union. Support for the provincial party fell to 6% and is thought to have negatively affected the federal NDP in the 1993 federal election. The provincial NDP was unable to recover its previous levels of support, and lost the

1995 Ontario general election The 1995 Ontario general election was held on June 8, 1995, to elect members of the 36th Legislative Assembly of the province of Ontario, Canada. The writs for the election were dropped on April 28, 1995. The governing New Democratic Party, led ...

. The Liberal Party was initially the main beneficiary of the opposition to the Social Contract, but, ultimately, the Progressive Conservatives won the election. In that campaign, the NDP was reduced from a

majority A majority, also called a simple majority or absolute majority to distinguish it from #Related terms, related terms, is more than half of the total.Dictionary definitions of ''majority'' aMerriam-Webster2018 election, when it became the

Official Opposition Parliamentary opposition is a form of political opposition to a designated government, particularly in a Westminster-based parliamentary system. This article uses the term ''government'' as it is used in Parliamentary systems, i.e. meaning ''th ...

. The Social Contract affected Rae during his 2006 run for

leadership Leadership, both as a research area and as a practical skill, encompasses the ability of an individual, group or organization to "lead", influence or guide other individuals, teams, or entire organizations. The word "leadership" often gets view ...

of the

Liberal Party of Canada The Liberal Party of Canada (french: Parti libéral du Canada, region=CA) is a federal political party in Canada. The party espouses the principles of liberalism,McCall, Christina; Stephen Clarkson"Liberal Party". ''The Canadian Encyclopedia'' ...

References

{{reflist 1993 in Canadian law Political history of Ontario Austerity 1993 in Ontario