The Federal Budget Impact on Jobs

The Budget estimate that a new round of cuts will eliminate up to 19,200 jobs  has been widely cited as fact, but it cannot be taken at face value as argued in an analysis released by the Public Service Alliance of Canada. An extract follows:

The government claims the $5.2 billion in spending cuts will mean the loss of 19,200 public service jobs. It says 7,000 of those will be dealt with through attrition. But how does the government know how many people will actually retire? Given the high household debt levels and uncertainty felt by most public service workers today, it’s likely many will choose to work longer, not retire earlier. That could mean many more lay-offs than the 12,200 the government claims to be anticipating.

The government’s 19,200 job loss figure also downplays the number of jobs that will be lost over the next three years, by excluding the 6,300 jobs still to be cut as a result of the previous 2007-2010 “strategic reviews” and another 9,700 positions that will be claimed by the 2010 personnel budget freeze. That could all add up to 35,200 less people working over the next three years.

The 19,200 number also excludes the thousands of term employees – many of whom are young – who will see their employment end with no notice or transitional support. In 2010, the federal government employed 26,000 of them. Nor does that number include the impact of cuts to organizations dependent on grants and contributions from the federal government. This includes Crown Corporations such as the CBC, which is being cut by $115 million. A lot of people doing contract work for the government will be out of work too. Economists estimate that the cuts to people and organizations dependent on government funding will cost a further 37,000 jobs by 2014-15.

It all adds up to at least 70,000 public and private sector jobs, plus however many term and casual workers aren’t rehired. But that may not even capture the full impact, given the number of small and medium sized businesses whose survival depends on those 70,000 salaries. Economists with the Canadian Association of Professional Employees estimate tens of thousands more could be affected, including sales clerks, workers in the construction industry, cooks and servers in the food service industry, accountants, architects, taxi drivers and hairdressers.