Too many civil servants? Too many perks? Too much pay?

By  Don Cayo  4 Feb 2011 Vancouver Sun

 

   Does Canada have too many public servants? Do we pay them too much while they're on the job, and too much again when they take early retirement and head out to pasture — or on to lucrative second careers?    Well, the C.D. Howe Institute's shadow budget — an annual exercise pointing out what Ottawa could do to get more bang for the taxpayer buck — suggests that well over half of Canada's massive federal budget could be eliminated in just four years by cuts to the public service. It advocates trimming the fast-growing number of public servants, cutting back on their unusually generous pension provisions, and holding the line on their pay.     The shadow budget also includes other measures — cutting back on subsidies for Crown corporations and on the myriad questionably productive tax exemptions, deductions, rebates, deferrals or credits" that favour particular businesses, interest groups or individuals.
    For my full analysis in The Vancouver Sun, click here. And to link to the shadow budget document, click here.
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Excerpts from full analysis:

Spending cuts alone -- well over half of which should be borne by the public service -- could produce a balanced federal budget in just four years, not five as Ottawa now plans, says a shadow budget released Thursday by the C.D. Howe Institute.  The analysis by William Robson, the president and CEO of the Howe, and Alexandre Laurin, the associate director of research, argues first that the federal government urgently needs to pare its spending so it can cope with future challenges. These include the expected slow growth of revenue during a period of sluggish recovery, a likely increase in interest rates that could add $10 billion in debt by 2015 for every percentage point they rise, a possible future downturn, and ever-mounting demands on government as the population ages and baby boomers retire.
It also argues there's fat to be cut in the public service. Tonnes of it.
Specifically:
During the last decade the public service, excluding the military and RCMP, grew 35 per cent while Canada's population increased just 11 per cent.
Total compensation for these workers increased from $12.8 billion in 1999/2000 to $27.4 billion, with the average per employee rising from about $67,000 to $94,000.
Public service pensions, which have an unfunded liability that the authors say is understated by $65 billion, is more generous than not only private sector plans, but also most other government plans. And MPs' pensions are better still. So it's no surprise that Robson and Laurin suggest scaled back compensation costs to "deliver more than half the improvement needed to achieve a surplus by 2014/15." And that they seek both a reduction in benefits and the shifting of more pension costs from employer to employee.