Canada’s 2017 budget: what federal staff need to know

By on 24/03/2017
Justin Trudeau, prime minister, Canada

The Liberals’ second federal Budget under prime minister Justin Trudeau, published on Wednesday, has been designed to please the middle class – upsetting public sector unions, which called for more spending on jobs and public services. But the Budget also contained new initiatives to scrutinise public spending in parts of government, to boost gender equality and to support science and innovation. Here’s our run-down.

Spending reviews

The Budget sets out plans to conduct three spending reviews, with the goal of better aligning public spending with political priorities. The government will report on their progress in next year’s Budget.

The first review – a comprehensive examination of at least three as-yet-unidentified government departments – aims to “eliminate poorly targeted and inefficient programs, wasteful spending, and ineffective and obsolete government initiatives”.

The second will look at ways to generate more value from fixed federal assets, such as office buildings, bridges and military bases, which cost around C$10bn (£6bn or US$7.5bn) a year to operate.

The third is a review of all federal innovation and clean technology programmes across all departments, to see how they might be simplified and consolidated at Innovation Canada – the agency dubbed “a one-stop-shop for Canada’s innovators”.

The government also plans to introduce legislation to make the parliamentary budget officer independent.

Public spending

Finance minister Bill Morneau unveiled a raft of measures on skills, jobs, infrastructure, healthcare and tackling tax avoidance – but most of the money had already been announced in previous spending plans. The budget, described by Morneau as a “very sensible approach”, includes just $5.7bn Canadian dollars (£3.4bn or US$4.3bn) in new net spending announcements ; by contrast, the 2016 budget announced $50.2bn-worth (£30.1bn or US$37.5bn).

Trade unions, including the Public Service Alliance of Canada (PSAC), have said the modest investments don’t go far enough. “Instead of significant reinvestment in public services, like creating more permanent employment opportunities, we are concerned about the possibility of the government pursuing privatisation,” said the union. But the government may be reacting to the economic uncertainties around Donald Trump’s election in the US, Brexit and a slowdown in global trade – all of which may hit global economic performance and, ultimately, Canada’s tax revenues.

Science and innovation

Aiming to elevate the importance of science in government, the Budget includes plans to establish a chief science advisor with a $2m (£1.2bn or US$1.5bn) annual budget, and to develop a new federal science infrastructure strategy.

However, according to the Professional Institute of the Public Service of Canada (PIPSC), a trade union, the announcement lacks strategic investments in more science staff, despite being heralded as a budget for innovation.

“After years of job and program cuts under the [Stephen] Harper government, at least 1,500 science jobs still need to be reinstated to maintain adequate service levels and restore important expertise,” said Debi Daviau, PIPSC president.

She also called on the government to make good on an earlier promise to shrink expenses on outside consultants. “Reducing the approximately $12bn [£7.2bn or US$9bn] annually now spent on outsourced public services would simultaneously strengthen public services and cut down on corporate profits made at taxpayers’ expense,” Daviau added.

Federal pay

Unions were also disappointed that the budget makes no mention of the botched Phoenix pay system, under which thousands of public servants were underpaid or left unpaid for months. Daviau described it as “one of the darkest – and longest – chapters in mismanagement of the federal public service”.

PSAC asked for the Budget to include a $75m contingency fund to fix the problems with pay, and has expressed its disappointment that the government has not responded.

Gender diversity

For the first time, the Budget includes a 26-page ‘gender statement’, which identifies the ways in which public policies affect women and men differently. According to the Budget more than 60 of its measures have differential gender impacts, but data is not readily available in many other areas.

“The government will continue to build capacity and expertise across departments, and to work with partners, to deepen its understanding of the impacts of policies on gender and other intersecting identities,” says the Budget report.

It proposes to provide $3.6m (£2.2m or US$2.7m) to fund the creation of an LGBTQ2 secretariat at the Privy Council Office, which will help coordinate government initiatives on LGBTQ2 issues.

The government has also proposed key investments in policy areas where gender imbalances persist, such as innovation and public infrastructure. Student financial assistance and skills training programmes are two areas earmarked for investment.

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See also:

Trump’s budget: federal staff braced for layoffs

Indian budget focuses on digital economy and rural growth

Canada offers civil service opportunities to indigenous students

Canada reveals latest recruit into senior public service from regional government

Canada’s former top official to become high commissioner to UK

Michael Wernick, Clerk of the Privy Council and Secretary to the Cabinet, Canada: Exclusive Interview

About Tamsin Rutter

Tamsin Rutter is a journalist based in Brussels, Belgium. She writes on a variety of topics, including public services, cities, local and central government and education. She was formerly the deputy editor of the Guardian's Public Leaders Network and Housing Network.

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