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Unions welcome federal budget promise to cap outsourcing, but fear service cuts

A copy of the federal budget is seen in Ottawa,  Tuesday, March 28, 2023. The federal government is proposing to reduce spending by 15 per cent by cutting back on consulting, travel and other professional services and it has led to mix feelings among the unions. THE CANADIAN PRESS/Adrian Wyld

OTTAWA — The federal government says in this year's federal budget that it will begin a new belt-tightening exercise that includes a 15 per cent cut to consulting, travel and other professional services — a move that has public-sector unions expressing mixed feelings.

Unions representing thousands of federal public servants are welcoming the Liberal government's decision to scale back on outsourcing, which Tuesday's budget says would result in savings of $7.1 billion over the course of five years and $1.7 billion each year after that.

Jennifer Carr, the president of the Professional Institute of the Public Service of Canada, says the decision will protect the public service from relying too much on management consultants, in particular, as the federal Liberals face scrutiny over contracts to firms such as McKinsey & Company.

"We celebrate the government’s decision to find $7.1 billion in savings through a cap on expenditures on outsourcing and consulting fees, not at the expense of public services Canadians rely on," Carr said in a statement.

"By capping outsourcing, the government is ensuring the quality and stability of the services we provide to Canadians."

The issue of travel is still top of mind, however, with some union representatives concerned that a one-size-fits-all model will limit the work of some public servants who require travel, such as field researchers.

The Liberals aren't the first to try to save money by cutting back on government travel. Stephen Harper's Conservative government introduced similar restrictions in 2012.

Its cuts to the operating budget resulted in hundreds of federal public servants being laid off, including at Veterans Affairs Canada, which has struggled with backlogs and long wait times ever since.

The head of the Public Service Alliance of Canada, which represents more than 150,000 federal workers, is raising alarm bells about another Liberal budget promise to reduce government spending overall by roughly three per cent or $7 billion over the next three years.

Its national president, Chris Aylward, says the government cannot find billions of dollars in savings without cutting services that Canadians rely on, though he says that the outsourcing cutbacks are a positive step forward.

"The last time we saw blanket reductions across the board, it meant major cuts to public services and the workers who deliver them," Aylward said in statement.

"You can't have it both ways. You can't find $15 billion in cuts without slashing the vital services that Canadians depend on."

Aylward called external management consultants "over-priced," and said that public servants deliver better services for the money being spent than the companies the work is outsourced to.

Michael Wernick, the Jarislowsky chair in public sector management at the University of Ottawa, says it is not unwarranted for the union to be concerned about cuts, but he says he thinks that layoffs in the public service are unlikely.

"This is basically a Goldilocks budget — neither too hot nor too cold. It's just enough restraint that they can say they're acting to restrain spending and get unions upset," said Wernick, who was Canada's top civil servant from 2016 until 2019.

Wernick said that the cuts in the budget don't compare to Harper's 2012 plan. He said the Liberals will be able to reduce the operating costs of government without laying people off because enough people are retiring and leaving the public service anyway.

This report by The Canadian Press was first published March 29, 2023.


This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.

Cindy Tran, The Canadian Press

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