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Labour Day Reality Check: Federal government should target 15-and-15 reduction for employee salary costs

Author: Aaron Wudrick 2020/09/03

             

  • Federal government labour costs have outpaced inflation and population growth since 2005 and now cost taxpayers $51.5 billion annually
  • Reducing total number of federal employees by 15 per cent and reducing remaining salaries by and average of 15 per cent would save taxpayers $14.3 billion

 

OTTAWA, ON: The Canadian Taxpayers Federation today released an analysis of soaring federal government labour costs and the need for cost savings as the government faces an unprecedented fiscal crunch and massive deficit.

“The reality is we couldn’t even afford the government we had before the pandemic, and we definitely can’t afford it now,” said CTF Federal Director Aaron Wudrick. “The sooner the government begins to live by the same rules that everyone else lives by, the less painful it will be in the long run.”

Between 2014 and 2018, federal government labour costs grew by 17.6 per cent, even though population growth was just 4.9 per cent and inflation was just 7.2 per cent. As of 2020, federal government labour costs are approximately $51.5 billion per year for 368,000 employees.

A 15 per cent reduction in the total number of employees paired with a 15 per cent average salary reduction for remaining employees would save taxpayers approximately $14.3 billion.

“Outside of government, millions of Canadians have lost their jobs, taken pay cuts, and seen their businesses go bankrupt,” said Wudrick. “Inside government, there have not even been modest pay reductions, and, in some cases, government unions are negotiating significant pay raises. This is totally out of touch with the new fiscal reality, and completely unfair to the taxpayers paying the freight.”

To read the CTF’s 2020 Labour Day Reality Check analyzing the change in federal labour costs, click HERE.


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