Ottawa’s fiscal hangover has kicked in
The question is – what, if anything, will the Liberals do about it? Or more precisely, what can they do, given they have already spent the large majority of their inflation-driven windfall and locked in higher program spending?
If the Liberals have a plan to offset the sharp increase in salary costs, they haven’t shared it with the public. During the budget lockup briefing for journalists in March, a senior government official did say that any settlement costs beyond projections used to prepare fiscal forecasts would simply be added on to the deficit.
Adding to Ottawa’s problems is language in the tentative agreement with PSAC that limits the ability of the government to lay off civil servants. PSAC has secured language that allows it to contest layoffs and that members “will not lose their job if they can perform the duties of a contractor already working with the federal government.”
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