The pandemic has left Ottawa with a labour-cost hangover
Ottawa’s budget plans have moved on from the COVID-19 pandemic, but its finances are still nursing the hangover. The biggest source of that headache over the next several years will be the bloated size of the federal civil service., tabled last week, mostly talks about the pandemic in the past tense, and mostly in self-congratulatory terms.
“Departmental result reports indicate that much of this expansion was prompted by the pandemic,” the PBO said. This is what’s in the background when we hear the government talk boldly about reining in spending, while its own expense forecasts paint a reality that doesn’t live up to the rhetoric. Still, as the majority line item in the government’s operating costs, any serious efforts to contain spending will have to face the postpandemic bloat in the public service. When the budget talks about finding $7-billion in savings over the next five years by “reducing eligible spending by government departments and agencies,” it’s hard to see that happening without containing, even reducing, payroll costs.
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