Public sector unions alarmed by budget plan to save billions through first program spending review in a decade

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Finance Minister Chrystia Freeland tables the federal budget in the House of Commons in Ottawa on April 7.Adrian Wyld/The Canadian Press

Public sector unions are worried about a budget commitment to find billions in internal savings through the launch of the first major review of federal program spending in more than a decade.

Thursday’s budget included brief mentions of two spending reviews and projected $9 billion in related savings over five years.

The first is a review of previously announced spending plans to support Canada’s recovery from the COVID-19 pandemic. The budget says this will reduce the pace and scale of spending that has yet to occur by up to $3 billion over the next four years.

The second announcement was the launch of a comprehensive “Strategic Policy Review” to be led by Treasury Board President Mona Fortier. This aims to produce $6 billion in savings over five years and $3 billion per year by 2026-2027.

Chris Aylward, national president of the Public Service Alliance of Canada union, said the announcement and lack of details are concerning.

“If this government thinks it’s going to push the cost of the pandemic onto the backs of our members, then it’s wrong,” he said, adding that federal public servants such as border agents and workers who processed emergency benefit payments played a major role. role in Canada’s response to COVID-19. “We find it very, very disrespectful of this government to come out with something like this that could possibly mean a cut in public services.”

Another union president, Jennifer Carr of the Professional Institute of the Public Service of Canada, also expressed concern.

“It was definitely a surprise announcement for us,” she said in an interview. “Our hope is that we can come in early and have some influence on that. Because the last time a spending review happened was during the Harper era, and it basically ended up cutting service delivery.

The new review will focus on two areas: the first will assess the programs based on their effectiveness in meeting key government priorities, which are described as boosting economic growth, inclusiveness and tackling climate change.

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The second area is described as finding areas to economize and reallocate resources to adapt “to a new post-pandemic reality.”

The budget says that could include reviewing federal spending on property and travel and whether more services can be managed digitally. He said this review will be “based in part on key lessons learned from how the government has adapted during the pandemic, such as increasing virtual or remote working arrangements.”

Sahir Khan, executive vice-president of the University of Ottawa’s Institute for Fiscal Studies and Democracy, worked on past spending reviews when he was a senior federal official.

The fact that such an exercise has not been done since the previous Conservative government was in power under Prime Minister Stephen Harper means it is expected and welcome, he said.

“It’s been a very long time. And, for me, it’s part of the context where the budget is being reset a bit,” he said. “After this kind of increase in spending, it is really important for the government, the civil service as well, to have a reset and to understand, ‘Okay, what’s working? What’s not? What’s aligned with government priorities? What is effective? What is less effective?’ And that’s what these reviews should really be about.

He said the big move towards working from home or hybrid arrangements adopted by the civil service during the pandemic means the government could likely make significant savings by reducing office space. Mr Khan said staff attrition – that is, not always replacing departing workers – has always been an important source of savings in such exercises. The fact that Canada is currently in a tight labor market means that now may be the time for the public service to save money in human resources by offering early retirement incentives.

“Along with a review, there must also be an HR strategy,” he said. “You may also have the opportunity to change the demographics of the public service. And I mean that in terms of inclusion and age. You can create incentives for people to retire early. And with a dynamic job market right now, there may actually be an advantage to doing it in a very human way.

When the Conservative government’s 2011 budget announced a strategic and operating spending review, the federal public service population was 282,352. It then fell to 257,034 in 2015, before climbing steadily after the election of the Liberal government of Justin Trudeau that year. The latest figures available show the size of the civil service was 319,601 in 2021.

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