Public-service cuts more than advertised and to hit front-line services: report

OTTAWA – A new analysis from the Canadian Centre for Policy Alternatives says the federal government has misrepresented cuts to the public service, and predicts there will be more job losses than advertised, with most in areas that impact public services.

The CCPA, a left-leaning Ottawa think-tank, said once all the numbers are in, the federal government will have eliminated almost 29,000 jobs and not the 19,200 announced in the March 2012 budget.

And judging from department employment estimates, most come from front-line operations and not administrative services as the government has claimed, the report said.

“Cuts within large federal departments are not coming from the ‘back office’,” said researcher David Macdonald, a senior economist with the think-tank.

“Most of the job cuts in big departments are coming from programs that deliver services to Canadians.”

The findings are similar to those in a January report from parliamentary budget officer Kevin Page, who calculated the early returns on the $5.2-billion spending reduction announced by Finance Minister Jim Flaherty in March 2012 came from front-line services, not a category Ottawa calls “internal services.”

“The continued increase in internal services expenditure suggests that spending growth on overhead has not been curtailed, as suggested in budgets 2010 through 2012 and the focus of restraint exercises has instead been on reduced spending to front line services,” Page concluded, although he acknowledged he was working on only partial disclosure from departments. The PBO has since taken Ottawa to court to acquire more information.

A spokesman for Treasury Board President Tony Clement disputed the CCPA report.

“This report is inaccurate and purposefully misleading. The job numbers cited in the report include temporary and term positions which by their nature are not permanent,” Matthew Conway, Clement’s press secretary, said in an email.

Conway added that “departments are introducing meaningful and transformative back office modernization that is improving service to Canadians.”

Macdonald’s analysis is based on departmental three-year spending projections published in annual reports on plans and priorities, which he says is the best indication of future government employment.

He concludes that by including spending restraint initiatives announced prior to the 2102 budget, the public service will wind up losing about 28,700 jobs by March 2016, reducing the federal bureaucracy to 347,500 positions from 376,100.

That amounts to a total loss of about eight per cent, with most of the positions eliminated in the current and next fiscal years. CCPA estimates there will be 13,400 positions cut in 2013-14 and another 9,500 in 2014-15.

Although the government has said about 17,000 jobs have already been excised so far, the CCPA analysis suggests only 3,100 positions have actually been removed from the books.

Macdonald said that may be due to a timing disconnect between the government announcement and when the department actually records the jobs eliminated, but either way, he says the data suggests this will be a rough year for the public service.

The report estimates that in relative terms, Statistics Canada will be the most hard hit of the large departments, losing 35 per cent of its workforce, or 2,230 jobs, followed by Human Resources and Skills Development and Veterans Affairs, losing 5,716 and 872 positions respectively, or about one quarter of their employees. The Canadian Food Inspection Agency and Aboriginal Affairs will shed 1,407 and 1,094 jobs respectively, representing about 20 per cent.

“If we could cut all this fat and not have an impact on services, that would be fine, but we can’t,” Macdonald said.

“Veteran’s Affairs is probably one of the best examples where the two biggest cuts … are coming from people that deal with veterans’ health care and those that deal with death and disability benefits.”

Of the big departments, only in the Canada Revenue Agency, which is slated to slice 2,491 jobs or six per cent of its workforce, are the majority of jobs losses categorized as internal services.

In percentage terms, the Canadian Northern Economic Development agency (51 per cent), the Canadian Grain Commission (44 per cent), the Office of the Privacy Commissioner (36 per cent), Canadian Environmental Assessment Agency (34 per cent), and the Canada School of Public Service (30 per cent) will also suffer deep cuts.

National Defence is in line for a large reduction in terms of raw numbers with a loss of 3,577 positions, but that represents only four per cent of the department.