Social Contract (Ontario)

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The Social Contract refers to a 1993 initiative of the provincial New Democratic Party government of Bob Rae in Ontario to impose austerity measures on the civil service.

The plan imposed a wage freeze and mandatory unpaid days of leave for civil servants, which became known as Rae Days.

Ontario in the early 1990s was in a deep recession and the government had a fairly large deficit. In 1993 the deficit was up to $12 billion annually and appeared as though it would soon grow to $17 billion. The government of the time was the social-democratic NDP led by Bob Rae. Rae asked for $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. The two largest unions, OPSEU and CUPE, both boycotted the talks. This left the government with the only action it believed was available, and that was to act unilaterally.

A major part of the government's initiative was to allow the civil service employers to force their employees to take up to twelve days of unpaid leave. This included every worker from teachers, to nurses, to accountants, but excluded workers who earned less than $30,000 annually. The initiative was extremely unpopular and lead to a long war of words between the NDP and their former labour allies. This contributed a great deal to the NDP's defeat in 1995 to the Progressive Conservatives under Mike Harris who then laid off 16,000 public sector workers.

Rae Days were successful in their original aims however: the government saved $1.95 billion and prevented public employee layoffs. They were also popular among some sections of the population, such as school children who got two weeks of March Break that year.

In a leaked internal memo "Memo shows Tories fear Ignatieff most", key Conservative strategist Doug Finley, describing Rae as the candidate his party would most like to take on as leader of the Liberal party (who Rae has defected to and was running in the leadership race for), saying that "Rae Days" would be made a campaign issue.