Municipal Workers Across 15 Loja Cantons Face Months of Unpaid Salaries as Provincial Budgets Buckle

Municipal employees across at least 15 cantons in Loja province are owed between two and four months of back pay, according to union leaders who organised protests outside the provincial government building on February 7.

The Federacion de Trabajadores Municipales de Loja said the worst-affected municipalities include Catamayo (four months in arrears), Saraguro (three months), and Gonzanama (three months). Even Loja city -- the provincial capital and largest municipality -- reportedly owes administrative staff one month of delayed salaries.

Why It's Happening

The salary crisis stems from a combination of factors:

• Delayed central government transfers: Municipalities depend on allocations from the national budget via the COOTAD. Union leaders say 2026 Q1 transfers are running 45-60 days behind schedule
• Inflation erosion: Municipal revenue from property taxes and fees has not kept pace with rising operational costs
• Population decline: Several smaller Loja cantons have experienced 8-12% population drops over the past decade as residents migrate to Quito, Guayaquil, or abroad

Impact on Services

"When workers are not paid, services stop," said union president Maria Elena Cueva. "Garbage collection in Catamayo has been reduced to twice a week. Road maintenance crews in Gonzanama have not worked since December."

The situation is particularly acute for the estimated 2,200 contract workers across the province, who lack job security protections and cannot access unemployment benefits.

What This Means for Expats

The salary crisis has indirect consequences for the expat community in the Vilcabamba valley and Loja city:

• Road maintenance on the Loja-Vilcabamba highway is reduced
• Waste collection schedules are disrupted
• Building permits and property transfers at cantonal offices are delayed

Several expat residents reported delays of 3-6 weeks in obtaining construction permits from the Loja canton building department, compared to the typical 5-10 business day turnaround.

Loja's prefect Jaime Castillo acknowledged the delays and attributed them to "temporary cash flow disruptions" that would be resolved once Q1 national transfers are processed.

Source: La Hora