$3.8 million goes poof!

There was a tiny little item in the Ottawa Citizen on Thursday. A total of 50 words on the second page of the City section. Seems that the City of Ottawa has not been paying OHIP fees for their 1,900 transit workers. That amounts to $800,000 per year and a back payment for four years of worker paid premiums to the tune of $3.4 million!

Now just hang on a second! This payment is due because an arbitrator ruled it to be so. But unless the collective agreement with transit workers is the most lucrative one in the whole wide world, this is surely a mistake on behalf of the arbitrator.

On the OHIP web site FAQ section there is a question asked and answered:

Q. If a collective agreement states that the employer would cover OHIP premiums, must the employer pay for the Ontario Health Premium?
A. Unlike the old OHIP premium, the new health premium would be a tax on individuals under the Ontario Income Tax Act. Unless employers have bargained to pay employees' taxes, we would not expect that this charge has been anticipated in collective bargaining agreements.
(http://www.fin.gov.on.ca/english/publications/healthpremium/healthfaqemp.html)

This means that unless the city has agreed in a collective agreement to pay the TAXES of the transit workers, they are not required to pay the OHIP premiums, As the answer says, the premium is treated as a tax on the individual.

So either the arbiter is wrong or the city was pretty dumb when it came to negotiations. Either way, the taxpayers are screwed again.