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Finance Minister Chrystia Freeland tables the federal budget in the House of Commons in Ottawa, on April 7.Adrian Wyld/The Canadian Press

Public sector unions are expressing alarm over a budget pledge to find billions in internal savings through the launch of the first major federal program spending review in more than a decade.

Thursday’s budget included brief mentions to two spending reviews and booked $9-billion in related savings over five years.

The first is a review of previously announced spending plans aimed at supporting Canada’s recovery from the COVID-19 pandemic. The budget said this will reduce the pace and scale of spending that has yet to occur by up to $3-billion over the next four years.

The second announcement was the launch of a comprehensive “Strategic Policy Review” that will be led by Treasury Board President Mona Fortier. This aims to produce $6-billion in savings over five years and $3-billion annually by 2026-27.

Chris Aylward, National President of the Public Service Alliance of Canada union, said the announcement and the lack of detail is a concern.

“If this government thinks they’re going to put the cost of the pandemic on our members backs, then they’re wrong,” he said, adding that federal public servants such as border officials and workers who processed emergency benefit payments played a major role in Canada’s response to COVID-19. “We find it very, very disrespectful by this government to come out with something like this that could possibly mean a cut in public services.”

Another union president, Jennifer Carr of the Professional Institute of the Public Service of Canada, also expressed concern.

“It was definitely a surprise announcement for us,” she said in an interview. “Our hope is that we can get in early and have some influence on that. Because the last time a spending review happened, it was during the Harper era, and it basically ended up cutting service delivery.”

The new review will have two areas of focus: One will assess programs in terms of how effective they are at meeting the government’s key priorities, which are described as strengthening economic growth, inclusiveness and fighting climate change.

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The second area is described as finding areas to save and reallocate resources to adapt “to a new postpandemic reality.”

The budget says this could include reviewing federal spending on property and travel and whether more services can be managed digitally. It said this review will be “based in part on key lessons taken from how the government adapted during the pandemic, such as through increased virtual or remote work arrangements.”

Sahir Khan, executive vice president of the University of Ottawa’s Institute of Fiscal Studies and Democracy, has worked on past spending reviews when he was a senior federal public servant.

The fact that such an exercise has not been done since the previous Conservative government was in power under prime minister Stephen Harper means that it is overdue and welcome, he said.

“It’s been a very long time. And, to me, it’s part of the context of the budget being a bit of a reset,” he said. “After this kind of surge of spending, it’s really important for the government, the civil service as well, to actually have a reset and figure out: ‘Alright, what’s working? What’s not? What’s aligned to the priorities of government? What’s efficient? What’s less efficient?’ And that’s what these reviews really should be about.”

He said the big move toward working from home or hybrid arrangements adopted by the public service during the pandemic mean the government could likely find significant savings by scaling back on office space. Mr. Khan said staff attrition – meaning not always replacing workers who leave – has historically been a significant source of savings in such exercises. The fact that Canada is currently in a tight labour market means the timing could be right for the public service to save money in human resources by offering early retirement incentives.

“With a review, there also has to be an HR strategy,” he said. “You may also have an opportunity to change the demographics of the public service. And I mean that in terms of both inclusion and age. You can create incentives for people to leave with early retirement. And with a buoyant job market right now, there may actually be an advantage of doing this in a very humane way.”

When the Conservative government’s 2011 budget announced a Strategic and Operating Spending Review, the population of the federal public service was 282,352. It then declined to 257,034 in 2015, before a steady climb following the election of Justin Trudeau’s Liberal government that year. The latest available figures show the size of the public service was 319,601 people in 2021.

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