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Canada's Chief Statistician Wayne Smith answers questions at his office at Stats Canada in Ottawa, Friday Feb. 11, 2011.Sean Kilpatrick/THE CANADIAN PRESS

Fiscal restraint is rippling through Canada's national statistical agency, prompting it to start slicing surveys and warn staff of cost cuts and impending layoffs in what it calls a "year of sacrifice" at the organization.

Not only is Statistics Canada facing reductions from the federal budget of about 8 per cent, it is also grappling with an "unprecedented" drop in revenue from other government departments that fund surveys, its chief statistician says.

As a result, "in planning for next fiscal year, we are facing an exceptional degree of financial uncertainty," said Wayne Smith in an April 2 address to staff that was obtained by The Globe and Mail and offers a rare glimpse into the impact of austerity on a government agency.

Trims are already under way – last Tuesday, the agency said on its website it will discontinue monthly new motor vehicle sales (it will still collect the data, but not publish it in its Daily release). Soon it is expected to end its leading indicator index, which tracks business cycles in the economy.

These cuts will likely affect the agency's ability to introduce new surveys and update existing surveys to reflect current population trends. Statscan now produces about 350 surveys on topics ranging from crime rates and mental health to the country's gross domestic product.

Details of cuts and the extent of staff reductions won't be known for another month, said Statscan spokesman Peter Frayne.

The federal budget chopped $33.9-million from the agency's budget by the 2014-15 fiscal year. But the austerity will go deeper than that: About a fifth of the agency's annual expenditures come from its cost recovery program, or revenue from other sources to conduct research. Most of those funds come from other federal departments such as Transport Canada or Human Resources and Skills Development Canada – many of which are facing cost cuts of their own.

"Given the financial pressures on our clients, we will experience a further loss of revenues from this source as well, currently estimated at approximately $20-million between last year and this, which I will tell you is an unprecedented change," Mr. Smith said. "We've never seen a movement that large, up or down, in our cost recovery revenues in one year."

All programs at the agency will be asked for a "year of sacrifice," its chief statistician told staff, curtailing expenses on everything from newspapers to hardware upgrades and staff training.

About a quarter of cost reductions will come from "new efficiencies" or doing the same with less, he said. The rest will come from "program reductions that are balanced between social statistics, economic statistics and internal services."

Taken together, the funding cuts "will impact how and what Statistics Canada can deliver to departments, agencies and the people of Canada," said Gary Corbett, president of the Professional Institute of the Public Service of Canada. "It's worrisome what will happen."

Only the highest-priority new initiatives will be approved, while other investments will be deferred, Mr. Smith said. The agency will continue with its labour force survey redesign, its consumer price index update, a community health survey and a survey on the financial security of Canadian households.

Pending cuts come as the agency was already under constraint. Its budget had been frozen for the past three years, even as wages increased. It has cut several surveys in recent years, including the participation and activity limitation survey (on people with disabilities), the workplace and employee survey, the national population health survey and two pilot projects on the environment.

Many of its economic reports run on a fixed timeline, such as retail sales. These reports need to be released every month and are vital components of the measure of gross domestic product – meaning less room for cost cutting. So many of the pending cuts could fall disproportionately on the social side of research, said one person familiar with the agency.

In a January interview with The Globe and Mail, Mr. Smith said his priority is maintaining the quality of existing surveys, even if it means doing fewer of them.

Editor's note: Statistics Canada, the subject of a story on Monday, will post unadjusted data on new motor vehicle sales on its CANSIM database, but it will no longer publish seasonally-adjusted data as a news release.