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Up to 68,000 public jobs to vanish under federal spending cuts: report

Finance Minister Jim Flaherty speaks before Parliament's finance committee on in Ottawa on Friday, Aug. 19, 2011. THE CANADIAN PRESS/Sean Kilpatrick

Federal government spending cuts could chop between 60,000 and 68,000 jobs from the public service in the next few years, a report from a progressive think-tank estimates.

The conclusion stems from a review of three separate rounds of restraint since 2007, and it suggests once completed in 2015, the federal public service could be trimmed to the lowest staffing levels since 2000.

Already, about 6,300 salaried positions are in the process of being eliminated as a result of department reviews launched between 2007 and 2010, designed to save $1.8 billion.

But that is the “tip of the iceberg,” says the report from the Canadian Centre for Policy Alternatives. The major impact on jobs will derive from the $2-billion departmental spending freeze announced in 2010, which is only now being put into effect, and the $4-billion Strategic and Operating Review that will be part of the coming budget.

In total, the three waves of cost cutting are intended to yield the government $7.8 billion in annual savings upon completion in 2014-15.

Government ministers have yet to reveal how they will apportion the cuts, but have conceded jobs will be lost through attrition and likely also layoffs.

Report author David Macdonald, a senior economist with the Ottawa-based think-tank, said he does not expect all savings will come from jobs and salaries inside the public service, although the majority will. Consulting firms, maintenance companies, non-profits who depend on Ottawa funding, may be impacted as well.

“But no matter how the cuts take shape, the job losses will be significant,” said Macdonald.

“One of the main issues is transparency. There is no government detailing of where the jobs are being cut, or why they are being cut.”

Parliamentary budgetary officer Kevin Page said the 6,300 figure in the first wave coincides with his calculation, but his office has not yet done an estimate of future job losses.

“This is something we will look at in our Budget 2012 analysis,” he said in an email.

In a paper issued earlier this month, Page concluded the Harper government was well on its way to meeting its cost-cutting objectives.

Overall, government spending during the first six months of the current fiscal year fell by three per cent to $123 billion. On the operational side, the target of the spending restraint, expenditures have been trimmed by four per cent in the same period.

Finance Minister Jim Flaherty insisted this week he does not plan to introduce a “slash and burn” budget, but has suggested in the past that some departments may be asked to find more in savings than previously expected.

Macdonald’s report posits three scenarios of public service implications ranging from the extreme — where all the savings come from jobs losses, resulting in 68,300 fewer salaried positions — to a mix, where departments achieve administrative efficiencies and job losses are limited to 60,100.

Under all scenarios, the impact varies geographically and by department.

The Ottawa-Gatineau capital region is expected to absorb the lion’s share of reductions, ranging from 11,200 at the minimum to 22,000 jobs in the extreme.

Coincidentally, the Conference Board of Canada recently tagged the job reduction in public service in the Ottawa region to the end of 2012 at about 9,000.

Big losses of up to 5,400 jobs are also likely in the Atlantic provinces, where the federal presence is strong.

Macdonald said he believes departments such as Corrections Services and CSIS, the spy agency, will be spared and will even grow.

But judging from the first wave of cuts, he expects sizable cuts to occur at Revenue Canada, Public Works, Human Resources, Health Canada, Fisheries, Foreign Affairs, Aboriginal Affairs and among civilian staff at Defence.

How the cuts will impact services is difficult to ascertain, said Macdonald, because the government has not been forthcoming about its plans.

“I think it’s an open question whether Canadians would agree to see staff in aboriginal programs, food and safety inspectors as well as programs accessed by the working poor be cut, while Corrections and CSIS grow,” he said.

“But without a detailed accounting of what is going on it’s impossible to carry on that debate.”