The recently released 2023 Ontario Sunshine List of government sector employees earning more than $100,000 has 300,570 names on it. Go back to 1996 and there were 4,501 people earning above that salary. Talk about inflation.
If that $100,000 threshold was itself actually adjusted for inflation the number of people on that list should only be 20,789. And that’s because $100,000 ain’t what it used to be. That’s actual inflation.
As a kid, I vividly remember ”$2.50 Tuesdays” at the movies. This was decades ago but I still think of it every time I go to the theatre, even though it’s an unfair point of comparison.
I can still complain at the price of a movie ticket now even after adjusting for inflation for a variety of reasons. But if I expected to only pay $2.50 today for a ticket on a Tuesday, you can immediately see how this would be ridiculous.
Ontario passed the Public Sector Salary Disclosure Act in 1996 under the Mike Harris government. “The purpose of this law is to provide a more open and accountable system of government,” according to the official website. And at the time, $100,000 was a big deal.
If you were pulling down a six-figure income, you could have bought a home without any assistance from your parents. Even in Toronto, where the average sale price of a home was $198,150 that year.
Using a simple metric of house price to gross personal income, that’s pretty much a dead on 2-to-1 ratio. If you were on this list in 1996, you’d be pouring Champagne as soon as you entered your income into a mortgage qualification calculator.
But $100,000 in 1996 would be the equivalent of $180,564.97 in 2024. And if you filter the 300,570 people on this year’s Sunshine List for that salary level, you drop 279,781 names. And these would still be mostly people for whom home ownership may not be possible without help from family or an inheritance.
Globe personal finance reporter Erica Alini pointed out last year that even those earning six figures are feeling the squeeze of Canada’s affordability crisis. With housing costs soaring and the cost of living on the rise, a $100,000 salary doesn’t necessarily equate to financial security in many parts of the country.
Another way of looking at the current threshold in Ontario would be to take $100,000 today and see what the 1996 equivalent would have been. Doing this reveals that instead of instituting a $100,000 threshold, the province should have gone with $55,381.73.
Other provinces seem to have varying salary disclosure thresholds. For example, Alberta has indexed thresholds that currently stand at $125,888 for government employees and $150,219 for people in public sector bodies. The federal government does not seem to pro-actively disclose much here, but a Canadian Taxpayers Federation access-to-information request yielded a record that simply states 110,593 employees in the federal public service earned $100,000 or more in 2023.
There are a couple of options for Ontario and other governments with non-indexing disclosure requirements. Resetting the threshold to a number that makes more sense today and then continuing to index the threshold going forward seems feasible.
We also don’t need to reveal the names of all individuals. The government could report aggregated salary ranges by job title rather than disclosing specific names below a second, lower threshold. This would maintain government accountability and transparency by still disclosing who the highest earners are.
As it stands, we have a list that publishes the names and salaries of potentially hundreds of thousands of people that could not afford to buy a house. This doesn’t seem aligned with the original intent of the disclosure act.
Preet Banerjee is a consultant to the wealth management industry with a focus on commercial applications of behavioural finance research.