Federal cuts will force big job losses, union says

OTTAWA — Canada's public service could face job losses of up to 50,000 if the Conservative government drives departments to cut deeper and faster than expected, says the union representing federal government economists.

Claude Poirier, president of The Canadian Association of Professional Employees, said the union estimates 110,000 jobs could disappear — including 50,000 in the public service — if the Conservatives press ahead with spending reductions of $8 billion by 2014-15. The union launched a major study several months ago to get a handle on the economic impact of the government's proposed spending cuts. The final study won't be released until later this month.

"If they do that, there is a major risk of creating a recession," said Poirier. "We're not fear-mongering. We are just reacting to the information the government is leaking.

"The only job creation from the Conservative government in this period will be additional seats in the House of Commons and more staff for MPs," he added.

The scale of the reductions estimated by the union are in line with the latest projections from the Canadian Centre for Policy Alternatives, which estimates job losses could hit between 98,000 and 108,000 with deeper cuts. Of those, 53,000 would disappear in the public service, with the rest coming in the private sector.

The left-leaning think-tank released an earlier study, funded partially by the two largest federal unions, which predicted job losses of between 60,000 and 70,000 across the country. About 25,000 of those would be in the public service.

David Macdonald, a CCPA economist, said deeper cuts could push the country's unemployment rate to eight per cent. The national capital region of Ottawa and Gatineau, Que., where most departments are headquartered, will be hardest hit, with Macdonald estimating between 16,000 and 30,000 jobs could disappear.

The government initially said it wanted to cut $4 billion in annual spending and asked departments to submit two scenarios — one for reductions of five per cent of their budgets and another for 10 per cent. The government has now indicated that the reductions could be closer to 10 per cent and spending could shrink by as much as $8 billion to eliminate the deficit faster.

Several bureaucrats said the government is assessing whether to accelerate those savings over two years rather than three, which could have a significant impact on the ability of departments to manage any staff cuts and layoffs under the existing job security provisions of the employees' contracts.

Ian Lee, a professor at Carleton University's Sprott School of Business, said the projected job losses for the public service sound large, but the capital region, with a workforce of 650,000, can absorb them without devastating the economy. The cuts would be easier over three or four years but, politically, it makes sense to accelerate them and get them over with before the next election.

"They will be old news by then, very old news. The economy will have digested the cuts and they will be gone from everyone's agenda," Lee said.

The Conservatives earlier suggested that the necessary cuts could be handled by attrition, especially with the boost from a large number of retiring baby boomers.

The Treasury Board's retirement projections, however, show that if departments didn't replace the people retiring they would still have to resort to layoffs for half the projected job cuts, said Macdonald.

Original Article
Source:  ottawa citizen 
Author: Kathryn May