The leader of Canada's largest public service union says the 2010 budget spells out widespread job losses in the bureaucracy, and that the government could provoke strikes if it plays hardball during upcoming contract negotiations.

Opposition critics, meanwhile, call the Conservatives' decision to freeze MPs wages mere "tokenism," and say the government is fulfilling a long-held Conservative fantasy to trim down the services provided by government.

The 2010 budget, released last Thursday, said the operating budgets for departments "will be frozen at 2010–11 levels" to help achieve the $17.5-billion in savings needed to slay the deficit by 2015. Of this total, the budget says some $6.8-billion will come from "containing the administrative cost of government."

While the budget remained silent on what this means for jobs in the public service, there is a widespread expectation this budget freeze will mean fewer jobs. Most expected the civil service to shrink through attrition, the process of not replacing retirees.

While the government said it will honour the 1.5 per cent wage increase negotiated with the public service in June, departments will have to find that money by trimming costs in other areas.

Bruce Flexman, the budget spokesman for the Chartered Accountants of Canada, said you can't cut departmental budgets without affecting the staff.

"Program spending is where they have to cut," he said. "And I think 85 per cent of that is wages, so there's the big target."

He said, however, that the government is avoiding a head-on collision with the public service by freezing departmental budgets rather than employee wages.

"Back in early '90s, the [Liberal government] actually froze the wages, and then they got into a big fight with the public service over whether they could freeze wages or not," he said.

Mr. Flexman said deputy ministers are now staring down the barrel of some tough decisions: decisions that will likely impact on staffing levels.

"This time, what they're saying is we're freezing the budget for wages, so if you want a 10 per cent [salary] increase you'll have to have 10 per cent fewer people working to keep the salary costs level," Mr. Flexman said.

John Gordon, the national president of the Public Service Alliance of Canada, said it's clear to his 166,000 members that job cuts are on the way.

"The $6.8-billion that's been taken out of the operation budgets is going to have a huge impact," he said. "I don't know, quite frankly, how they're going to be able to do that without a reduction in the size of the workforce."

He predicted the government will not replace anyone who exits the public service through retirement or otherwise.

Mr. Gordon said that PSAC's members will begin negotiating a new collective agreement in winter 2011, and predicted "it's going to be a very tough road to hoe when we go into bargaining next year.

"Our members, if they're not able to conclude a fair and decent collective agreement, they will take whatever action is required to secure a good contract," he said. "Strikes will come as a result of not being able to negotiate a collective agreement."

The union leader said this move fits with the philosophy of the political right.

"The Reform Party, which has morphed itself into the Conservative Party, have been saying that for ages, that their philosophy is smaller government," he said.

At the budget lockup, Department of Finance officials said the decision to freeze the wages of Parliamentarians does not amount to very significant savings. They said that wage freeze will save $1-million this year, $2-million next year, and $3-million the following year. This is a mere drop in the bucket, they said, of the $17.6-billion the federal government at large plans to save over the next five years.

Opposition critics interpreted this move as a political cue to the public service to brace for impact.

NDP MP Paul Dewar (Ottawa Centre, Ont) called the decision to freeze MP's wages "tokenism."

"I think they're doing this so they can go to the public service and do the same, and perhaps go further," he said. "They haven't put in bold letters 'we're going to cut jobs,' but the assumption is built in that there are going to be losses."

Like Mr. Gordon, Mr. Dewar said the end effect of this freeze is that Canadians will receive fewer, and lower quality services from the federal government.

"This government is not keen on the business of government, I think that's what you've seen in this budget," Mr. Dewar said. "They don't look at innovating public services, they look at shedding them."

Liberal MP David McGuinty (Ottawa South, Ont.) said the civil servants in his riding are worried.

"The public servants I know in this region and around the country who work for the federal government are deeply concerned and deeply disturbed, and Canadians should be," he said. "Jim Flaherty is doing in Ottawa what he did at Queen's Park."

Mr. McGuinty said that Treasury Board President Stockwell Day (Okanagan-Coquihalla, BC) is sharpening his blades for some ugly cuts.

"[Mr. Day] is going to wield a scalpel across government departments, agencies, boards and commissions like we haven't seen in a very, very long time," he said. "This is all a bad signal for a public service that needs refreshing."

But Mr. Flexman from the CCA said that the time has perhaps come to trim the public service.

"In some respects probably isn't a bad approach," he said. "Many economists would think we do have to start thinking about cutting the size of our public service if we're having an aging population and an economy that's not going to grow as fast."

jdavis@hilltimes.com

The Hill Times