A policy analysis of Bill-124 and the nursing shortage

Introduction

Canada’s growing health spending is a significant issue that many health leaders, politicians, and Canadians alike recognize needs immediate proprietary action.^1,2 “Canada’s per capital spending on healthcare was among the highest internationally” with an estimate of $8,563 per Canadian in 2022. ¹ Provincial governments are faced with challenges of how to balance their finances, while still answering to taxpayer's health needs. Looking back to 2019, the Ontario government passed Bill-124 ³ as an attempt to reduce its provincial debt burden. The purpose of this policy was to cap wage increases among a group of public sector workers, including healthcare providers. ³ Recognizing that nurses are healthcare workers affected by Bill-124 ³ , and that there is a current shortage of nurses across Canada, ⁴ the focus of this policy analysis is to address the question: how did Bill-124 reach the Ontario government’s agenda in the midst of a nursing shortage? Why was this specific policy action successful in being implemented as a possible solution to remediate provincial debt burden?

Nurses comprise the largest portion of the Canadian healthcare workforce. ⁵ Many studies, including that of Tomblin Murphy et al., ⁶ forewarned of the nursing shortage for the past decade. This shortage has been pronounced with the recent COVID-19 pandemic. ⁴ Compounding this existing problem is the fact that healthcare spending has been increasing across Canada. ³ Several Canadian provinces have attempted to stabilize their fiscal healthcare spending by implementing a policy to freeze nurses’ wages, limit pay increase, or reduce their hourly rate. The result of this monetary decision has an impact on nursing recruitment, retention, and demoralization. ²² As Ontario recently passed Bill-124, this policy analysis attempts to strategically investigate Bill-124 using Kingdon’s framework, ⁷ consisting of three independent streams: the problem, politics, and policy streams, and when these streams are collectively considered, they open a window of opportunity for this policy consideration. ⁷

The problem stream

The root problem arises from Canada’s steady increase in healthcare spending over the last few decades. This has posed significant challenges for provincial governments’ healthcare expenses based on tight fiscal restraints. ³ Notably, Ontario’s debt is one of the largest subnational debts worldwide. ³ A large portion of this government expense is attributed to public workers’ wage compensation. ³ As a substantial proportion of public sector workers include nurses, among other professions, the government may see this as an opportunity to effectively moderate the growth of compensation costs and use Bill-124 to balance the Ontario government’s fiscal situation. ³

Moreover, Howlett et al. ⁸ explain that when a problem may be amenable to government intervention, it then becomes a policy problem, meaning the problem is perceived to be a public issue requiring government action. In this way, the Ontario government believes it has a responsibility to remedy this situation and begins to consider policy action. ⁷ How a problem is defined is critically important, thus the Ontario government appears to have used the concept of issue framing to selectively construct the problem definition, influencing the way the issue is perceived by the public. ⁸ The government frames this issue of increasing healthcare spending to affect the public, as it “is in the public’s interest to maintain important public services that matter most to the people of Ontario.” ³

Not all problems may be amenable to government correction though. The ongoing nursing shortage may not be considered a policy problem, but rather a long-standing condition which poses public and government concern but is not significant enough in the eyes of government to constitute policy action. ⁸

The politics stream

In the Kingdon framework, there are visible and hidden participants who play key roles in how the politics stream flow. ¹⁰ A key visible participant in politics, notably the change in Ontario government leadership after the 2018 election, allowed for new ideas to be brought forth for policy changes.^10,11 The Premier used the media to highlight issues of high healthcare spending and Ontario’s growing debt, acknowledging that cuts to public sector workers’ wages may be an effective method to minimize Ontario’s deficit without increasing Ontarians’ taxes or reducing essential health services. ¹²

The media responded to the Premiere’s statements to protect frontline services and jobs, aiming to responsibly manage the public sectors’ wages, implying that many public sector workers were overpaid, further framing the issue in favour of public support. ¹² Another news article stated that between 2016 and 2018, nurses were given 1.4% wage increases each year, an amount which hospitals at the time reported was “too rich” and came “almost entirely, from the public purse.” ¹³ One perception that was not highlighted is the fact that the inflation rate in 2018 was 2.27%, ¹⁴ and looking forward, the inflation rates now continue to climb to 6.8% in 2022, ¹⁴ and 3.9% in year of 2023, ¹⁵ meaning the 1.4% wage increase is in fact a decrease in nursing pay. Media stories such as these sway public opinion on the matter, persuading the public to think nurses are being paid more than enough, and making the Ontario government’s proposition to cap public sector nurses’ wages more acceptable to the public.

The policy stream

Hidden participants within the government, those who are experts and analysts, examine the problems and politics, and propose policy solutions to address them.^8,10 In June of 2019, the Ontario government proposed Bill-124 in an effort to stabilize Ontario’s fiscal healthcare spending, and enforcing a cap on certain public sector workers’ wage increases to only 1% annually. ³ It states these regulatory measures, which would be effective for a three-year moderation period, are enacted in the public’s interest to ensure continued sustainability of public sector services in the future. ³

Other provincial jurisdictions have proposed similar actions for nurses’ wage moderation. For instance, Alberta imposed an “immediate 2% pay cut for United Nurses of Alberta members and another that would take away important scheduling protections for nurses.” ¹⁶ In Nova Scotia, a similar bill was introduced by the provincial liberal party. Bill-148 was proposed to restricting nurses’ wage increase to as low as .5%. ¹⁷ When looking at political preferences combined with Pierson’s emphasis that once a path dependence has been established and “sufficient movement down a particular path may eventually lock in one solution,” the cost of policy reversal is high.^18(p253) As such, the Ontario government’s decision to consider and move quickly to pass Bill-124 served to benefit the provincial fiscal objective at the time and failed to consider the long-term impacts to the nursing profession in the province.

A window of opportunity

When the three independent streams (problem, politics, and policy) converge and meet at the same time, a policy window opens, and the issue may then be seriously considered by policy-makers. ¹⁰ Routinized windows often dictate agenda openings, and in this case, it is plausible the Ontario 2019 budget cycle provided an opportunity for the wage cap issue to be put on the government’s agenda.^8,19 Of note, policy actors may have been aware of this issue for quite some time and only when formulating the 2019 budget was a proposition pushed forward to address the wage cap.^8,19

The Ontario 2019 budget report states that the government aims to balance the budget in a responsible and sensible manner, with a debt-reduction strategy to rebalance its finances by 2023-24. ¹⁹ It commits to eliminating Ontario’s net debt-to-GDP ratio of 40.8%; however, without additional revenue, balancing Ontario’s budget would require spending $8.6 billion less on healthcare by 2022-23. ²⁰ The report hints on government plans to consult with public sector employers and bargaining agents to manage compensation costs and ensure wage negotiations are modest and sustainable. ¹⁹

Not coincidentally, Bill-124 was accepted and swiftly passed later that year in November 2019, signifying the government’s plans to enact prudent fiscal stewardship by reducing public sector employees’ annual wage increases to 1%. ³ The media shed light on the enactment of this Bill, revealing Bill-124 would indeed save the Ontario government more than $8.4 billion over the three-year period of wage caps, aligning with the government’s budgetary goals.^20,21 Additionally, with the current rate of inflation being approximately 6.8% in 2022, ¹⁵ the annual 1% wage cap increases equate to a decrease in nurses’ pay by 5.9%, providing the government further savings in public sector compensation.

Evidently, the timing of the problem, politics, and policy streams have very likely led to the window of opportunity for this issue to land on the government’s agenda, suggesting Bill-124 was a plausible solution to address Ontario’s healthcare spending and debt problem. The acceptance and passing of Bill-124 reveals the government’s ideas and interests, suggesting evidence that savings from public workers’ compensation will contribute to Ontario’s budget restoration, while also re-balancing the financial relationship between the institutions of provincial and federal governments.

Playing to one’s interests

When developing Bill-124, policy actors likely considered the costs and benefits of this proposed solution to ensure the government would have control over its desired effects. The government frames the policy as benefiting Ontarians, to stabilize provincial healthcare spending and sustainability of the healthcare system. ³ As Bill-124 was framed to provide diffuse benefits to the public, the public may believe this policy indirectly benefits them, reducing the chance of any objection. These diffuse benefits may suggest the Ontario government is using saved money from not paying increased wages to nurses and other public sector workers, to apply them to other healthcare areas, benefiting the larger spectrum within healthcare, while also reducing provincial debt and stabilizing finances.

On the contrary, public sector workers such as nurses, as a singular population, would bear the brunt of this policy through wage caps, exemplifying concentrated costs from this policy. As such, with careful planning and framing the benefits of this policy to cater both the government's and general public's interests, the government ensured a smooth and swift passing of Bill-124, prompt enough to prevent adequate time for nurses and their unions to react and rally before its passing.

Discussion and limitations

There are limitations to this policy analysis, as the authors have no access to conversations behind closed doors to learn why the Ontario Government chose to include nurses in this Bill and exempt other professions. Predictably, the Bill has resulted in an increased shortage of nurses within the province. ²² Political leaders are well aware of this shortage challenge, as evidenced by a strategy to counteract this situation by offering financial incentives if nurses stay or come to work in Ontario. ²³

Since Bill-124 came into effect, the Ontario Nurses’ Association has been working with stakeholders (nurses, politicians, union representatives, and the general public) to repeal this Bill for numerous reasons: ²² (a) the 1% cap on wage increases, when inflation was 6.8% ¹⁵ in 2022, decreases nurses’ salaries by 5.9%; (b) the Bill interferes with the Charter of Rights to freely bargain; ²⁴ (c) demoralized nurses are forced to exit the province or profession for better career opportunities; ²⁵ and (d) there is possible gender discrimination, as male-dominated professions (such as the police and firefighters) are exempt from Bill-124. ²²

Though the Government of Ontario exposed outliers of nurses who make over $100,000 annually through the Ontario Sunshine List, ²⁶ it is important to note that most nurses get paid hourly and require a tremendous amount of overtime work to accumulate greater than $100,000. This overtime is also often due to staffing shortages. ²⁷ As such, if there was public consultation on Bill-124 and if the progress of this Bill did not pass as quickly as it did, it might have been challenging for the Ontario government to pass this Bill from the beginning due to the continuing support of multiple media outlets of nurses as the “backbone of effective health systems.”^3,28

Recommendations for health leaders

This policy analysis set out to analyze Bill-124. Health leaders can use knowledge gained from analyzing the implementation of Bill-124 to understand the backbone and interrelation aspects of policy implementation. When political actors and government bodies make such decisions, it has a rippling effect: impacting the healthcare system and society as a whole, causing further deterioration to the current challenge presented by the nursing shortage. The authors propose the following three recommendations with examples to address the challenges:

Recommendation 1: Retention strategy through monetary recognition

The government in Nova Scotia recognizes the necessity to keep the nurses currently employed in the publicly funded healthcare system. In early spring of 2023, the Nova Scotia Premier announced a $10,000 appreciation bonus to nurses currently working in NS Health, and an additional $10,000 for their commitment to stay working in the Nova Scotian system for another two years. ²⁹ This is the boldest and most proactive approach by any Canadian government body towards nurse retention.

Recommendation 2: Recruitment and retention strategy

Also in Spring of 2023, Nova Scotia nurses voted in favour of the new contract with Nova Scotia Health which agreed to the cumulative increase of 21% to nursing wages. ³⁰ The contract also includes additional premiums and incentives such as better work-life balance, and workplace safety. With the full support of the government, this agreement was retroactively applied to 2020 and expires in 2025. This is the highest percent increase within Canada in recent years with the goal of retaining existing nursing staff and incentivizing the recruitment of new nurses.

Recommendation 3: Structured transition to practice programs for new hires

In addition to the monetary incentives, health leaders should pay more attention to new graduate nurse retention as one of many strategies to address nursing shortages. Research shows that newly graduated registered nurses have up to a 60% turnover rate within the first 12 months of employment and are more likely to leave the nursing profession if proper support is not available. ³¹ Another study completed in 2023, suggests that to increase retention of new nurses hospitals should implement comprehensive evidence-based Transition To Practice (TTP) programs, which research suggests can result in a return on investment with cost savings ranging from $735 to $1,458 per new nurse when implemented.^32-35 Furthermore, a randomized controlled study with a large sample size (1,063 nurses across 105 hospitals) ³⁶ indicated that hospitals fully adopting evidence-based, structured TTP programs retain as much as 88% of new nurses compared to those that provide usual on-boarding processes with no structured TTP programs. Finally, implementing a structured TTP program not only increases retention, but it also has positive impacts to quality and safety practices, increased job satisfaction, higher competency levels, reduced work stress, and patient care error, as well as greater financial return on investment. ³⁶

Conclusion

Recommendations 1 and 2 are actions the Nova Scotian government has recently taken to meditate and improve the nursing shortage issue. These recommendations and strategies exemplify probable actions that many health leaders across the country can consider implementing within their own jurisdictions to further amalgamate the efforts of addressing this widespread political and nursing shortage issue, not only as a result of Bill-124 in Ontario, but also policies in other provinces that likewise detrimental to the ongoing nursing crisis.