The national capital area alone could lose between 11,000 and 22,000 jobs as federal departments begin to digest three waves of the Conservative government's spending cuts over three years, says a study by a left-leaning think tank.
Two of the largest federal unions, the Public Service Alliance of Canada and the Professional Institute of the Public Service, helped fund the study. Unions strongly criticize the government for conducting its spending reviews in "secret," without any public debate about what is on the chopping block and why.
With the highest concentration of federal jobs and suppliers, the capital region will be the hardest hit. At the most extreme, the region could see more than 22,000 jobs disappear by 2014-15, driving unemployment to 9.2 per cent, the study says. The report says the most likely scenario is about 11,000 lost jobs in the region. In that scenario, the public service will shrink by 25,000 jobs across the country with total job losses at Crown corporations, not-for-profits and businesses that rely on government work hitting about 60,000.
"The local picture could be very dramatic, depending on how the cuts are done," said David Macdonald, the CCPA economist who wrote the report. "There could potentially be 22,000 jobs in two or three years but that's a worst-case scenario."
As the budget approaches, the capital region has been gripped with speculation about the scope and impact of the cuts. The Conference Board of Canada has estimated the region would lose about 9,000 public administration jobs in 2011 and 2012.
Ian Lee, a professor at Carleton University's Sprott School of Business, is "skeptical" of the report's projected job losses. He said it has a union bias and argued the government has said nothing to indicate that many federal jobs could disappear. Lee, considered a fiscally conservative economist, said he finds the CCPA's research is often ideologically and advocacy-driven and doesn't have the rigour and scholarship of the Conference Board or C.D. Howe Institute.
"The numbers seem steep. I would certainly want to see more data and research on this," he said.
The report tracks three waves of spending cuts and lays out three possible scenarios on how the government could achieve those reductions. The study acknowledges the lack of information makes it difficult to determine "where the axe will fall." It argues the government has tightened the noose on information about reductions with each succeeding initiative, which calls for larger reductions than the previous one.
The first round came with a series of strategic reviews that all departments went through between 2007 and 2010 to find savings and realign their operations with government priorities. Those reviews found savings of $1.8 billion that could eliminate about 6,300 jobs between now and 2013-14.
An examination of the departments' reports on plans and priorities show departments, however, are still digesting those 6,300 job cuts and most won't disappear until next year and the year after. That means people who will be declared surplus or laid off in this first round will be getting notices as the cuts from the two succeeding waves kick in.
The next wave of cuts was announced in the 2010 budget when the Conservatives slapped a freeze on all departments' operating budgets, including salaries. This forced departments to absorb wage increases out of their own pockets. All told, another $2 billion is to be trimmed from departmental budgets by 2014-15.
But the biggest cuts will come from the third round of $4 billion in cuts that public servants are waiting for in the upcoming budget. In this strategic and operating review, departments came up with two scenarios — one for five-per-cent cuts and one for 10-per-cent cuts for each of the next three years. The government has already hinted that some departments may face cuts exceeding 10 per cent.
Macdonald said the region could face a "burst" of layoffs. While departments are still digesting the cuts from the strategic reviews, they haven't put a dent on the next two rounds of cuts, which total about $6 billion.
Original Article
Source: ottawa citizen
Author: Kathryn May
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