What will Carney's 15 per cent cut mean for the public service?

Ottawa Citizen

2 days ago

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'We'd really love to see the details of how, because the execution is often more complicated than the intention of these exercises,' Khan said, noting that the spending base in the operational budget that is cuttable is between $180-$200 billion.
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Many departments and agencies could shrink, but DND will likely grow, as the prime minister has promised to reach a NATO pledge to spend 2 per cent of GDP on defence by the end of this fiscal year.
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It might be hard for some public servants to transfer to DND, as the skills required could be different from the expertise government workers have in other departments and agencies.
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While Champagne asked ministers to come up with 15 per cent in savings, some question whether that will actually be realized.
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Jason Jacques, the PBO's director general of economic and fiscal analysis, said 'probably not' and that there are 'still a lot of questions' around how the government will approach cuts in an unstable geopolitical context.
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Jacques added that gutting departments that could need more capacity later in a time of crisis could result in a scramble to 'race back and hire all the people, right?'
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Khan said he believes the Liberal government may be looking to find 'a pool of opportunities' on what can be cut.
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'I think cabinet wants to figure out what's possible, they'll assess the political implications of cutting program spending in certain areas and the feasibility of increasing it,' he said.
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Can attrition prevent layoffs?
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In the Liberal campaign platform, Carney promised to find $28 billion in savings for reallocation.
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'So it really shouldn't have been a surprise to think that have been telegraphed pretty clearly during the election,' Khan said.
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Still, Carney's rhetoric promised a side-stepping of cuts to the public service in favour of a so-called cap. During the election, Liberal campaign officials told the Ottawa Citizen that a cap for the public service would be done through attrition, and that more details would emerge in a spending review.
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Khan said he expects that there could be a 'greater reliance' on attrition than layoffs, due to the upfront costs of providing severance to laid off public servants.
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Jacques pointed to a surplus in the Public Service Pension Plan that could be leveraged 'if you get creative' to offer incentives for attrition.
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For example, Jacques pointed to the possibility of omitting pension penalties for early retirement for public servants.
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By using the pension surplus, Carney's government could avoid the fiscal hit on the government's bottom line.
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'So they could decide that they wanted to offer some additional generosity on that front to make things easier on public servants transitioning to the next stage of their career,' he said.