26 September 2023

CANADA: Booming public sector hits the wall

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Canada’s Federal Budget has proposed an across-the-board three per cent spending cut for all Departments and Agencies — a belt-tightening move after years of continual growth in the Federal bureaucracy.

The proposal is one of several that the Liberal Government said would save more than $C15 billion ($A17 billion) in Government spending over the next five years.

Minister of Finance, Chrystia Freeland (pictured) said the three per cent cut would be phased in by 2026-27 and would not include layoffs or staff reductions in the Public Service.

“Those savings will come from Government operations, and I think those savings are eminently attainable,” Ms Freeland said.

“The savings are the right thing to do — aiming to find a balance between investing in Canadians and continuing to be a fiscally-responsible Government.”

The Budget document, titled A Made-in-Canada Plan, also says the spending reductions won’t affect services.

The Government is also proposing to reduce spending on consulting, travel and other professional services by 15 per cent of planned 2023-24 spending, saying this will bring in a savings of $C7.1 billion ($A8 billion) over the next four years.

President of the Professional Institute of the Public Service of Canada, Jenn Carr applauded the decision not to cut services or jobs.

“We celebrate the Government’s decision to find $7.1 billion in savings through a cap on expenditures on outsourcing and consulting fees, not at the expense of public services Canadians rely on,” Ms Carr said.

“By capping outsourcing, the Government is ensuring the quality and stability of the services we provide to Canadians.”

However, head of the Public Service Alliance of Canada, Chris Aylward expressed scepticism.

“They are unable to explain exactly where they’re going to get these savings from. So we’re very concerned about that, we’re concerned about potential job losses as a result of this Budget,” Mr Aylward said.

The Government is proposing $C6.9 million ($A7.7 million) over two years to advance a “restorative engagement program that would empower employees who have suffered harassment and discrimination, and drive cultural change in the Public Service”.

The funding would also go toward a review of the processes for addressing harassment, violence and discrimination complaints.

Executive Director of the Black Class Action Secretariat, Nicholas Marcus Thompson said a commitment of more than $C40 million ($A44 million) to establish a mental health fund for Black Public Servants was a step in the right direction.

However, he had concerns about whether the program would include Black leadership, noting that the Treasury Board had previously failed to include Black workers during the first stage of creating the mental health fund last year.

Ottawa, 1 April 2023

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