Federal Payroll Expected to Exceed $55 Billion in 2022: Parliamentary Budget Office

Parliamentary Budget Officer Yves Giroux prepares to appear before the Senate Committee on Official Languages in Ottawa on June 13, 2022. Justin Tang/The Canadian Press

Payroll for federal employees is expected to surpass $55 billion this year, according to a report by the Parliamentary Budget Officer (PBO).

Titled “Supplementary Estimates (B)” and published on Nov. 18, the report says hiring of public servants has been on the rise in the past seven years.

“Government spending on public servant salaries and benefits is forecast to climb to almost $55 billion this year—or about $130,000 per full-time employee,” the PBO wrote, as first reported by Blacklock’s Reporter.

“The cost drivers of personnel spending are the number of personnel (represented by full-time equivalents, or FTEs), and their level of compensation.”

The report noted that between 2015 and 2020, the number of FTEs grew by an average of 2.3 percent each year, “from roughly 342,000 to 391,000.”

“The hiring restraint of 2006 to 2015 was more than fully offset by growth over the past seven years,” it said.

According to the PBO’s calculations, personnel spending grew by an average of 6.7 percent annually, from $39.6 billion to $60.7 billion, in the last seven years. Compensation for each full-time staff rose on average 4 percent yearly.

“Based on the Government’s spending plans, PBO projects that over the next five years, the number of FTEs will reach over 409,000 by 2026–27. By that time, PBO projects personnel expenditures to reach $59.1 billion,” the report said.

‘Ballooning Bureaucracy’

The Canadian Taxpayers Federation (CTF) says the PBO report depicts a “ballooning bureaucracy” under the leadership of Prime Minister Justin Trudeau.

“The Trudeau government needs to take some air out of its ballooning bureaucracy,” said federal director Franco Terrazzano in a news release issued on the same day the report was published. “Struggling Canadian taxpayers can’t afford more bureaucrats with bigger salaries.”

Terrazzano called on the Liberal government to rein in its labour costs.

“It’s not fair to ask the Canadians who lost their job or took a pay cut during the pandemic to pay higher taxes so the federal government can add thousands of bureaucrats with bigger salaries,” he said.

The Department of Finance Canada has described all federal spending as an economic stimulus.

“All government spending feeds through into some real economic activity,” Nicholas Leswick, associate deputy finance minister, testified before the Standing Committee on Finance on May 11, 2021.

“Basic national income accounting would suggest that government spending would feed through and provide some sort of fiscal impulse into the economy—some more, some less, depending on the type of government spending.”

“Some of it leaks out of the economy, such as through exports, but it does find its way into either the pocketbook of a consumer or the income statement of a business,” Leswick added.

‘Capacity of Taxpayers to Pay’

In a hearing before the Commons government operations committee on Nov. 4, 2020, then-treasury board president Jean-Yves Duclos said Canadians could afford to pay for public employees’ wage increases.

Duclos was responding to Tory MP Kelly McCauley who asked why he had approved a 2.6 percent wage increase to public servants during the COVID-19 pandemic when “millions of Canadians were losing their jobs.”

“Why would you give such a generous increase when the country was in such a raging economic downfall and running massive deficits?” McCauley asked, noting that the 2.6 percent represents an increase of 62 percent “above what the average Canadian would have received during the good times.”

“First, it was out of respect for the work of public servants,” Duclos said.

“Second, respect for the capacity of taxpayers to pay for the important work of the public service.”