FEDERAL EMPLOYMENT BLOAT COSTING TAXPAYERS AT LEAST $10 BILLION ANNUALLY

Buried among the many tables in Statistics Canada’s June employment report are data on public sector employment: federal, provincial and local employees hired by departments, agencies, hospitals and schools, including universities and colleges. As of June, 4.412 million workers were public employees, representing 21.5 per cent of Canada’s workforce. That is an astonishing 972,000 more (28.3 per cent) than in 2014, when 3.439 million Canadians were working for governments. And the numbers don’t include contracted services.

Over this period Canada’s population rose 12.2 per cent. Why public sector employment had to grow at more than twice that rate is hard to understand. The effect of such feverish growth is clear, however: it has pushed up wage rates and likely would have done so even if three-quarters of public sector workers weren’t unionized. Private employment, including self-employment, has risen only 12.4 per cent since 2014 — almost the same rate as population growth. If it weren’t for immigration, private employers would be desperate for workers and would have had to forgo production.

All governments in Canada are expanding their workforces, but the most rapid growth is in the federal government. From 2014 through last year, the non-military federal civil service grew from 257,138 to 357,247. That is an astounding 38.9 per cent, more than three times the rate of growth of population.

This rapid expansion in the federal labour force has weighed heavily on the federal budget. In 2023, the federal government spent $50.8 billion on non-military wages and salaries, at an average cost of $142,600 per person (including CPP, EI and other social contributions). If the growth of federal bureaucracy had instead matched Canada’s population growth, we would now have 69,000 fewer federal employees. That would have saved taxpayers $10 billion in 2023, enabling federal personal income taxes to be cut by $1,000 per family of four.

With so many bureaucrats milling about, decisions slow down as files are passed from one to another. Accountability is lost. Departments point fingers at each other, as we have seen in the ArrriveCan debacle. New programs are hatched and more employees hired whether they are needed or not. With work-from-home, less gets done as unsupervised employees walk the dog or do the shopping. With labour productivity flat or falling, getting tasks done requires hiring more and more workers.

The Canada Revenue Agency had 59,019 employees as of last year. That’s up 46.5 per cent from 2014. According to the latest federal tax gap report, however, compliance and collections have barely budged as a share of federal revenues despite the much larger workforce. This evidence is anecdotal but, like most people I know, I dread having to call the CRA to complete a transaction that cannot be done on the website. Who has a free hour or two to spare?

Public Services and Procurement Canada now has 18,114 employees, up 51 per cent from 2014. This is the same ministry the Auditor-General recently criticized for failing to challenge departments that were violating procurement rules related to professional service contracts that were sole-sourced (e.g., McKinsey) or not properly documented (ArriveCan).

The “no-pipelines” Impact Assessment Agency of Canada had 452 people in 2023, double the number employed by its 2014 incarnation, the Canada Environment Agency. Despite its size, or perhaps because of it, the agency has approved only a trickle of projects in the past several years, as a Canada West Foundation report detailed last year.

The Public Health Agency of Canada, mired in controversy over two fired scientists with connections to China, employed 4,211 people in 2023, up 94 per cent since 2014. A jump during the pandemic could have been expected but employment grew by another 1,000 employees after 2021.

Refugee and Citizenship Canada employment doubled from 5,927 employees in 2014 to 12,258 last year. Getting a visa for Canada can be slow to process for some countries — 125 days in the case of Switzerland, for example.

Finally, Women and Gender Equality Canada has 468 employees — up 380 per cent since 2014. Finance Canada has a wide-ranging economic agenda compared to the WGEC department, yet Finance is only twice as big. DEI seems a higher priority for this government than budget balance.

I could go on, but it would be too painful. Though the federal bureaucracy has exploded you would be hard-pressed to see an equivalent explosion in performance. Instead, uncontrolled federal hiring has become a major cost to Canadians. And therefore a future election issue, as well.