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Prime Minister Stephen Harper (R) and Finance Minister Jim Flaherty (L) walk to the House of Commons to deliver the budget on Parliament Hill in Ottawa. (Dave Chan for The Globe and Mail/Dave Chan for The Globe and Mail)
Prime Minister Stephen Harper (R) and Finance Minister Jim Flaherty (L) walk to the House of Commons to deliver the budget on Parliament Hill in Ottawa. (Dave Chan for The Globe and Mail/Dave Chan for The Globe and Mail)

Tory budget axes 19,200 public-service jobs Add to ...

The federal government will eliminate 19,200 public service jobs by 2015, including 600 executive positions, according to the budget tabled on Thursday.

The cuts are smaller than some had expected, but they will mark the beginning of a tumultuous year in the public service, as managers look to determine which jobs should be shed and federal workers examine severance and alternate employment options.

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The budget reveals, in broad strokes, how the government will spread out a total of $5.2-billion in spending cuts, but it could take a week or more before a clearer picture emerges of which workers will be affected.

A large proportion of the job losses will occur in the National Capital Region, while the regional distribution of public service work is not expected to change significantly. About 7,200 jobs are expected to be eliminated by attrition.

Public service union leaders say they’re still analyzing the cuts, but are worried they could threaten peoples’ access to government programs.

“They give no detail as to where those cuts are going to be, other than to say the majority are going to be in the National Capital Region,” said John Gordon, president of the Public Service Alliance of Canada. “Not only is it the cuts that concern us, there’s no detail with respect to which services are going to be affected by this, which programs are going to be affected. That’s where the devil is.”

Mr. Gordon pointed to a $56.1-million cut from the Canadian Food Inspection Agency. “Does that mean that we should be worried about food inspection in this country?” he said.

Gary Corbett, president of the Professional Institute of the Public Service of Canada, said he’s worried the budget cuts could lead federal departments to give up some of their regulatory duties. The PIPSC is one of six public service unions that have formed a coalition to oppose cuts to public programs and services that they say risk undermining transparency and accountability.

“We certainly shouldn’t be using a budget as a way to push off work to the private sector that should be done by the government,” Mr. Corbett said.

Slightly less than 400,000 people were employed by the federal government in 2011, and the workforce cuts outlined in Thursday’s budget would reduce that total by 4.8 per cent.

But shedding jobs in the public sector isn’t a simple process – and it can be expensive. Workers in core public administration jobs who are not part of management are covered by a workforce adjustment agreement that offers them a range of options in the event their jobs are no longer needed.

Under the terms of workforce adjustment, managers are expected to try to find a reasonable alternative for employees whose jobs are being cut. The offer must be for full-time employment in the public service, usually in the same city and at the same level.

If that’s not possible, workers whose jobs are being cut will have between three and four months to choose one of the following options. They can remain in the same position for up to a year, with pay, while looking for another job; they can resign and take a lump-sum payment; or they can combine a lump-sum payment with money designated for tuition and related expenses.

The government has pegged the total cost of severance packages and other measures at $900-million.

Andrew Graham, who teaches policy at Queen’s University and worked in the public service for more than 30 years, said the agreement means workers are usually well protected.

“Yes, it can be personally difficult, but the workforce adjustment generally is very humane,” he said. “For the most part, it has treated people pretty well.”

There has been speculation that the government could offer more generous departure packages and retirement incentives to help ease the process. The challenge with that, Mr. Graham said, is that it could convince some of the most talented employees and incentive to leave, knowing they’ll have little trouble finding work elsewhere.

When the public service was cut in the 1990s, workers were offered generous incentives to retire early or leave the public service.

“After the last mass exodus in the 1990s, there were very strong feelings that many units were left in disarray because certain people left, and there was no knowledge transfer taking place,” Mr. Graham said.

Some union leaders said they had worried the job cuts were going to be much deeper than the budget revealed them to be.

“We were hyped for $8-billion in cuts, so finding out that $5.2-billion in cuts is the reality is a relief,” said Ray Zwicker, from the Canadian Association of Public Employees. “It’s certainly better than the model we ran with the numbers we were given.”

Andrew Jackson, chief economist for the Canadian Labour Congress, said he thinks the number of public service jobs the government says will be eliminated is slightly understated, “but plausible.” But he said it doesn’t take into account the number of private sector jobs that will be lost as a result of the budget tabled on Thursday.

Mr. Jackson said he expects that about 25,000 public service jobs and 25,000 private sector jobs will be lost. “It’s not going to derail the economic recovery, but there are certainly going to be a lot of people suffering,” he said.

Follow on Twitter: @kimmackrael

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