Update: Extra cost of Toronto staff raises

In January 2017 I published a preliminary analysis of rises in Toronto’s staff costs as Toronto is in financial difficulty because it gave a huge raise to its staff. In that article I had estimated that Toronto is paying roughly $1.5B extra, annually, to cover pay increases above inflation and the extra cost of more staff.

Since then we have given the limited data that we could find to a friend of Budgetpedia, Asher Zafar. Asher is a highly accomplished professional data analyst and economist with an impressive resumé of certifications and experience. He has used formal analysis techniques to come up with a more cautious estimate of $950M per year (~$1B). Here is his report. His spreadsheet of calculations can be seen here.

April, 2017

We used variance reports and salary expenditure from Budgetpedia data sources. Given that, we observed a small increase in staffing since 2004 that is a little smaller than the population growth, but much larger salary increases.

After adjusting for inflation, average salary per staff went up at a 1.7% compound annual growth rate (CAGR)

The effect comes in at about $950M a year from raises in present day.

In the same time period, the average salary in the city of Toronto decreased.

Our potential hypothesis include unchecked merit pay for long-tenured employees; perhaps more outsourcing and “higher-level” work required of city staff, as contracting and transfers expenditure have gone up even more.

We’re open to any hypotheses or thoughts from the city, but better data would make such an analysis more transparent and easier.

Henrik Bechmann founded the budgetpedia project in July of 2015, and is currently the project lead (see budgetpedia.ca). The opinions expressed here (except as noted) are his own.