Statscan to abandon no-layoff policy as budget cuts loom

Statistics Canada is abandoning its long-standing no-layoff practice as the agency faces budget cuts, though its chief statistician says reductions will not erode the quality of its data.

In a memo to senior managers, the Ottawa-based agency effectively abandons its no-layoff approach, which had been in place since the 1980s. Statscan, which employs nearly 5,000 full-time workers, has been asked, along with other federal departments, to submit proposals for a potential budget cut of up to 10 per cent.

Details of the size of the reductions will come in the 2012 federal budget, said the two-page memo, which was obtained by The Globe and Mail. The federal departments have been asked to review budgets with the aim of saving $4-billion to $8-billion a year. Statscan's recent memo shows no agency is immune, even one tasked with collecting and analyzing economic and social trends in the country.

"In this environment, it will be difficult for the agency to maintain its no-layoff policy," it said.

Former chief statistician Ivan Fellegi introduced the policy in the mid-1980s, when the agency faced stringent cost cuts. Statscan has not seen a major head-count reduction in that time. An estimate by the parliamentary budget office last year pegs planned job cuts at the agency at 725 jobs, or 13.5 per cent of its work force.

"Given the government's fiscal situation, I have no expectation that Statistics Canada gets a pass," chief statistician Wayne Smith said. "My expectation is that we will be asked to make some reductions in our program."

Flagship economic surveys such as the labour-force survey or the consumer price index, will not be affected, he said. Statscan could discontinue niche surveys or reduce the frequency of some releases – which is preferable to shrinking sample sizes, he said.

"We would rather reduce the scope of the program in order to maintain the quality of what we're producing, than degrade the quality in order to maintain the scope of the program," he said.

Mr. Smith wouldn't speculate on the extent of job cuts, but he said some could be handled through attrition.

"Our job is to make sure that the impact is as small as possible on the effectiveness of the national statistical system."

Statistics Canada conducts about 350 active surveys a year on topics ranging from egg production to cancer, crime and employment rates, and the national census every five years. Some parts of the agency may go under the knife, but Mr. Smith is beefing up others – including the consumer price index and tracking the environment.

The sample for the country's key inflation measure will be expanded to collect prices on some items more frequently and its weighting updated more frequently to reflect fast-changing consumer habits.

"It's all in the effort to make sure that all of these decisions that are being made based on the consumer price index are being based on very solid statistical information."

The agency will also run a survey on the financial security of Canadians, something it hasn't done since 2005. The study, which will help assess the financial wellbeing of the population, will be conducted this year, with a release next year. Previously, it was conducted irregularly; Mr. Smith wants to ensure it is now carried every five or six years.

Mr. Smith would also like to track retirement trends more closely– how people are staying at work longer, how they transition into retirement and the impact of changes in pension plans. And the environment – everything from air quality to greenhouse-gas emissions – is a new priority. These areas help determine quality of life, and yet Canada lacks good measures for them, Mr. Smith said.

"We'd like to do better," he said.

The agency aims to track three pillars, he said: social, economic and environmental trends. "We want to do a good job on all three things, and the one we don't think we're doing as well as we should is the environment."

The agency shapes its priorities based on consultations from a range of stakeholders, from data users and the National Statistical Council to provincial governments and the federal government.

Mr. Smith was named chief statistician a year ago after Munir Sheikh resigned in 2010 over the federal government's decision to scrap the mandatory long-form census in favour of a voluntary survey.

Unlike his two predecessors, Mr. Smith believes historical comparisons of census data could be possible, despite the change. "It's not a given that there's going to be significant problems with comparability," he said.

The 2011 national household survey garnered a response rate of 69.3 per cent, while the long-form in 2006 had a response rate of 94 per cent.

"The danger in 2011 is that because of the significantly lower response rate we're going to see response bias creep in. … That's what we're going to look at and assess," he said. "You could in fact make comparisons to 2006, potentially."

The first swath of census data will be released on Feb. 8 and will give details on population and dwelling counts, based on answers from the short-form questionnaire.

About the same number of people were referred to prosecutors for non-compliance in last year's census collection as in 2006, Mr. Smith said – about 50 or 60 people.

The agency has been studying various approaches for the 2016 census. Mr. Smith will submit his recommendations to the federal government for approval this year; he said it's too early to say which he will recommend.