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Ontario Premier Doug Ford has refused demands from public-sector union leaders to repeal Bill 124, even as the pandemic plunged health care and long-term care into crisis.CARLOS OSORIO/Reuters

Lawyers for a coalition of unions acting for hundreds of thousands of Ontario’s public-sector workers were in court on Monday to launch their constitutional challenge of the province’s Bill 124, legislation that temporarily caps annual compensation increases at 1 per cent.

Leaders of the Ontario Federation of Labour and unions acting for nurses, teachers and other public-sector workers involved in the challenge held a morning rally in the rain outside the Toronto courthouse where the case is being heard.

They argue the legislation, a political flashpoint throughout the pandemic, has driven away nurses and personal support workers, and many who remain suffer from burnout as the health care system buckles under the strain of COVID-19.

“Bill 124 is not just an attack on unions,” said JP Hornick, president of the Ontario Public Service Employees Union (OPSEU). “Unions are the front line for all workers in setting what our standards should be.”

Interim Opposition NDP Leader Peter Tabuns told the crowd by the courthouse steps that the wage-hike caps, imposed in 2019 when inflation was low, amount to large wage cuts now, with inflation at more than 7 per cent. His party pointed to new government data on Monday that said the average emergency room wait for patients in July was 20 hours, saying this is further evidence of the crisis.

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Over a two-week hearing before Ontario Superior Court Justice Markus Koehnen, union lawyers will argue the bill is an unjustifiable violation of the rights to collective bargaining and to strike that courts have recognized as embedded in the guarantee of free association in the Charter of Rights and Freedoms.

The bill, passed as a cost-saving measure before the pandemic, limits all workers in the public sector – including universities and colleges, school boards, Crown corporations and agencies as well as direct employees of the provincial government – to 1 per cent compensation increases a year for a three-year period. Because unions negotiate contracts at different times, some have come through that three-year period, including Ontario’s education workers now in bargaining.

Ontario Premier Doug Ford, who boasted of growing support among private-sector construction unions in his spring re-election campaign, has refused demands from public-sector union leaders to repeal Bill 124, even as the pandemic plunged health care and long-term care into crisis. In previous remarks, he has stressed that the bill is temporary, and noted his government’s $5,000 pandemic retention payments to nurses.

Speaking shortly after his Progressive Conservative government was re-elected in June, he pledged to treat nurses in coming labour talks “fairly,” noting the rising rate of inflation.

However, union leaders say that even after the three-year periods expire, Bill 124 still forbids unions from seeking any back pay to make up for lost increases. It also blocks arbitrators from awarding any such increases to workers, such as hospital nurses, who cannot strike. If the bill were struck down, the government could face a long list of catch-up wage demands.

In its written arguments filed with court, the provincial government denies the legislation violates the Charter. Lawyers for the Ministry of the Attorney-General say Bill 124 was needed to rein in Ontario’s finances without cutting services, laying off workers or raising taxes. They rely on evidence from former Bank of Canada governor David Dodge about the pressures on the province’s books when the law was passed. But since then, the pandemic has forced Ontario to run record deficits.

The government argues Bill 124 does not stop collective bargaining or forbid strikes. All it does, the government says, is “foreclose one particular bargaining or arbitral outcome.”

“The Charter does not guarantee unlimited annual raises for public sector workers,” the submission reads.

Ontario argues Bill 124′s compensation limits are similar to those imposed by other provinces and the federal government in the past and upheld by the courts. The bill does not trip over the legal hurdle of “substantial interference” in collective bargaining, they say, as it is time limited and “broad-based” and allows bargaining on other matters, including compensation increases below 1 per cent.

Union lawyers spent much of Monday outlining their case that Bill 124 does amount to substantial interference in collective bargaining and has affected many low-paid public-sector hospital and long-term care workers, a large number of whom make just over minimum wage.

The unions also argue the bill violates Charter provisions against sexual discrimination, noting many affected workers are women and many are racialized. The government counters that its legislation applies to all workers it covers equally and does not target women.

No decision is expected soon, and the matter could end up before the Ontario Court of Appeal and then the Supreme Court of Canada. The Ontario government has not said if it would consider using the Constitution’s notwithstanding clause to restore the legislation if it lost in the courts.

Mr. Ford enacted the rarely used clause just last year, when a court overruled his spending limits on election-advertising for third parties, such as unions. Mr. Ford also threatened to use the clause, despite widespread opposition from constitutional experts, after a lower-court judge tossed out his 2018 legislation cutting the number of Toronto’s city councillors nearly in half.