OTTAWA — The Conservative government is freezing departments’ operational budgets for another two years, further ratcheting up the pressure on upcoming labour negotiations where wage increases will risk more job cuts.
The freeze, which kicks in next year, will affect all departments and separate agencies and is expected to generate $1.7 billion in savings over two years, said Heather Domereckyj, a spokesperson for Treasury Board President Tony Clement. The government signalled the freeze in the throne speech and the Finance department’s documents show the hold on operating budgets will save an ongoing $1.1 billion a year.
“Our government will ensure departments operate within available resources to provide taxpayers with the services they require,” said Domereckyj in an email. “We will continue to manage the public purse in a prudent and fiscally responsible manner on behalf of all Canadians.”
The government slapped a similar operating budget on departments in the 2010 budget and the biggest impact was that departments had to absorb the three-year 5.3 per cent wage settlement Treasury Board negotiated with the 17 unions representing Canada’s public servants. Treasury Board has historically given departments money to cover the wage increases it negotiates.
This comes on top of the mounting impact of cuts that are working their way through the system. Departments are still swallowing billions of dollars worth of spending reductions implemented since 2010 and the ongoing $1.1 billion in savings generated by the latest operating freeze will jack that up to $13.7 billion in ongoing savings by 2017-18.
With the cumulative impact of all the cuts, federal managers have very little room to manoeuvre when facing this operating freeze, which means there will be no hiring and probably more layoffs. That puts unions in tough position at the bargaining table, knowing their wage demands could lead to more job losses.
The size of the public service reached its peak in 2010-2011 when employment in the core public service and separate agencies hit 282,955. In the two years following the last operating budget freeze — which implemented a $1.9 billion ongoing spending cut — the net number of jobs decreased by 5,000.
That was before the Conservatives’ downsizing budget of 2012 which cut $5.2 billion in spending and 19,200 jobs over three years. Departments implemented most of those cuts in the first year, wiping more than 16,000 jobs off payroll.
Although the Conservatives have grown the public service more than any government in the past 20 years, some say the government could reverse much of that growth by time the cumulative impact of the cuts roll out by 2017-2018.
Milt Isaacs, president of the Canadian Association of Financial Officers, said the freeze is another “cheap” squeeze on departments and avoids making tough political decisions like getting rid of programs or deciding what kind of public service Canada should have.
“Freezing departments’ budgets is a cheap shot to departments. This one size fits all doesn’t work for programs and is a mockery.”
Bureaucrats say Treasury Board had set aside money to cover possible negotiated wage increases but the freeze means it will hang onto it as savings rather than dole it out to departments. That $1.1 billion would cover a raise roughly in line with inflation.
The government’s wage bill is about $44 billion a year, its single largest operating cost. The cost of wage increases in line with inflation, for example, could be the biggest bill the Conservatives will pay before the next federal election.
The freeze will add to the tensions at the upcoming round of collective bargaining, which is already poised to be one of the toughest in years.
It will be the first round under the new ground rules the Conservatives imposed on unions with an overhaul of the Public Service Labour Relations Act. The highly controversial reforms dramatically diminish the power of unions and their bargaining clout at the negotiating table.
Public servants and their unions are also losing the public relations battle with the government, which stokes the image of the overpaid public servant. A report by the Parliamentary Budget Office, however, showed public servants aren’t that much better off than a decade ago. The big increase in the wage bill was caused by the combination of the government’s hiring spree and inflationary wage increases. Only four per cent of wage growth represented real salary gains.
Unions are resolved not to make concessions at the negotiating table but they have lost a lot of leverage. The big issue is to replace the existing sick leave regime, but the government could put anything on the table, from layoff protection and seniority to union security and threats to pensions and health benefits.
Original Article
Source: ottawacitizen.com/
Author: KATHRYN MAY
The freeze, which kicks in next year, will affect all departments and separate agencies and is expected to generate $1.7 billion in savings over two years, said Heather Domereckyj, a spokesperson for Treasury Board President Tony Clement. The government signalled the freeze in the throne speech and the Finance department’s documents show the hold on operating budgets will save an ongoing $1.1 billion a year.
“Our government will ensure departments operate within available resources to provide taxpayers with the services they require,” said Domereckyj in an email. “We will continue to manage the public purse in a prudent and fiscally responsible manner on behalf of all Canadians.”
The government slapped a similar operating budget on departments in the 2010 budget and the biggest impact was that departments had to absorb the three-year 5.3 per cent wage settlement Treasury Board negotiated with the 17 unions representing Canada’s public servants. Treasury Board has historically given departments money to cover the wage increases it negotiates.
This comes on top of the mounting impact of cuts that are working their way through the system. Departments are still swallowing billions of dollars worth of spending reductions implemented since 2010 and the ongoing $1.1 billion in savings generated by the latest operating freeze will jack that up to $13.7 billion in ongoing savings by 2017-18.
With the cumulative impact of all the cuts, federal managers have very little room to manoeuvre when facing this operating freeze, which means there will be no hiring and probably more layoffs. That puts unions in tough position at the bargaining table, knowing their wage demands could lead to more job losses.
The size of the public service reached its peak in 2010-2011 when employment in the core public service and separate agencies hit 282,955. In the two years following the last operating budget freeze — which implemented a $1.9 billion ongoing spending cut — the net number of jobs decreased by 5,000.
That was before the Conservatives’ downsizing budget of 2012 which cut $5.2 billion in spending and 19,200 jobs over three years. Departments implemented most of those cuts in the first year, wiping more than 16,000 jobs off payroll.
Although the Conservatives have grown the public service more than any government in the past 20 years, some say the government could reverse much of that growth by time the cumulative impact of the cuts roll out by 2017-2018.
Milt Isaacs, president of the Canadian Association of Financial Officers, said the freeze is another “cheap” squeeze on departments and avoids making tough political decisions like getting rid of programs or deciding what kind of public service Canada should have.
“Freezing departments’ budgets is a cheap shot to departments. This one size fits all doesn’t work for programs and is a mockery.”
Bureaucrats say Treasury Board had set aside money to cover possible negotiated wage increases but the freeze means it will hang onto it as savings rather than dole it out to departments. That $1.1 billion would cover a raise roughly in line with inflation.
The government’s wage bill is about $44 billion a year, its single largest operating cost. The cost of wage increases in line with inflation, for example, could be the biggest bill the Conservatives will pay before the next federal election.
The freeze will add to the tensions at the upcoming round of collective bargaining, which is already poised to be one of the toughest in years.
It will be the first round under the new ground rules the Conservatives imposed on unions with an overhaul of the Public Service Labour Relations Act. The highly controversial reforms dramatically diminish the power of unions and their bargaining clout at the negotiating table.
Public servants and their unions are also losing the public relations battle with the government, which stokes the image of the overpaid public servant. A report by the Parliamentary Budget Office, however, showed public servants aren’t that much better off than a decade ago. The big increase in the wage bill was caused by the combination of the government’s hiring spree and inflationary wage increases. Only four per cent of wage growth represented real salary gains.
Unions are resolved not to make concessions at the negotiating table but they have lost a lot of leverage. The big issue is to replace the existing sick leave regime, but the government could put anything on the table, from layoff protection and seniority to union security and threats to pensions and health benefits.
Original Article
Source: ottawacitizen.com/
Author: KATHRYN MAY
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