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Inconvenient statistics for BC's public sector

Author: Mark Milke 2001/07/09

As a measure of the inconvenience statistics sometimes cause, Statistics Canada recently published an updated table of public sector employment across the country. Year-over-year, public sector employment is up by 31,100, or 1.1 percent, to about 2.9 million people across Canada. The figure for total public sector employment in British Columbia is similarly up, but by a larger percentage, 1.8 percent, or 6,600 more people on the taxpayer tab, for a new made-in-B.C. total of 333,054.

This data, along with past StatsCan measurements, will be especially inconvenient for those who argue that the public sector in British Columbia "suffered" some kind of dramatic cut during the past decade.

For example, let's start with the size of government in B.C. (Remember: this includes all levels from federal to municipal and everything in between.) Back in 1992, the total size of government in British Columbia, relative to the economy, was 47.2 percent, which declined to 43.8 percent in 1998. That's a reduction of 3.4 percent over six years. Does this mean the BC government was on a cutting spree in the 1990s Were all those new Crown corporations just a figment of our imagination

Nope. Remember that that "reduction" was a relative measure, i.e., relative to the economy, which still grew, albeit weakly. Moreover, to get an idea of how BC's total public sector fared in the 1990s relative to Canada, look at what happened across the country.

While public sector spending, as a share of the economy, dropped marginally in B.C., it dropped much more steeply in every other province. The reductions ranged from 6.4 percent in Quebec (the next smallest reduction after B.C.) to double-digit drops in Newfoundland (-13.7 percent), Prince Edward Island (-10.8 percent), Alberta (-12.6 percent), and Saskatchewan (-16.4 percent).

Thus, as of 1998, the size of government was 37.4 percent in Ontario and 31.2 percent in Alberta. British Columbia "beats" both of them by a country mile at a size-of-government-to-economy ratio of 43.8 percent. (Other provinces, the "have-nots", are larger, due mainly to transfer payments from, well, us.)

In addition, and in light of current public sector wage wrangling, look at the trend in public sector wage costs to taxpayers over the decade. In 1992, the total public sector wage bill in Canada (adjusted for inflation) was $121.7 billion, which dropped to $108.1 billion by 2000, a decline of 11.2 percent. In comparison, the total public sector wage bill in just British Columbia rose from $13.3 billion in 1992 to $13.5 billion in 2000, a real increase of 1.7 percent.

That may not sound like much, except that BC's private sector taxpayers saw their own take-home pay drop in the 1990s, and every other province saw the public sector wage bill decrease: from a smallish -0.7 percent in PEI to double-digit drops in no less than six other provinces. In Manitoba and Alberta, the overall cut in taxpayer payouts to the public sector dropped by 22.3 percent.

Put simply, when the federal government cut its public sector costs in every province - including B.C., and when other provinces curtailed spending, British Columbia's total public sector wage bill somehow, mysteriously, continued to rise, the only province where that happened during the 1992-2000 period.

Given that the feds cut expenditures in BC during the 1990s, and municipalities were not on a hiring spree, that means a significant ballooning of provincial government wage costs occurred this past decade. That is sort of an inconvenient fact for the public sector unions that might wish taxpayers to believe otherwise.

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