PBO: On austerity, size of the civil service, and computers

With just a few weeks to go until the end of Ottawa’s current fiscal year (March 31), the Parliamentary Budget Officer’s latest review of the government’s latest spending plan [pdf] concludes the federal government will spend about $259.9 billion this year or just 0.3% more than it spent in fiscal 2013.

And yet, the PBO believes that spending should have been higher as the government made, but did not follow through on, several spending commitments:

Parliamentarians may wish to clarify why the Government was unable to fulfill its  spending commitments in the current year and seek guidance regarding when these investments will be made.

While the political opponents of the federal Conservatives talk about investing (i.e. spending) some of the budgetary surpluses Ottawa will find itself enjoying as soon as next year, the PBO looks at what the Conservatives have planned on “direct program expenses (DPE)” and concludes that, by fiscal 2018, Ottawa will not be spending very much at all in relative terms.

DPE as a share of the economy is  projected to fall to a generational low by 2017-18.

That, folks, is also known as a period of austerity.

[DPE, incidentally, is a rough proxy for “discretionary spending” and is the type of spending that Ottawa looks to first when it needs to retire a deficit or reduce debt.]

Also in that latest PBO report: The PBO also notes that while the Conservatives have eliminated about 15,000 positions from the public service, the costs of the public service are as high as ever. Here’s the chart and explanation from the PBO:


In 2013–14, spending on personnel is estimated to decline by 0.9% compared to 2012–13. The decline in [personnel spending] has not kept pace with the 5.5% decline in personnel employed. This is attributed to severance benefits for terminated staff as well as the elimination of voluntary separation benefits. With respect to the latter, an estimated 93% of federal employees have opted to receive a one–time payment for accrued voluntary separation benefits, leading to a short-term increase in federal personnel costs in 2012-13 and 2013-14.

Now, many critics of the Harper government, upon seeing the headcount of the civil service decline, have wondered if the government is simply replacing unionized, full-time staff with temporary contract workers. I’ve asked Treasury Board if there’s a way to measure that and a Treasury Board spox says that if the government itself hires someone on a contract and the government is the employer, than that employee does indeed show up in the “headcount” numbers above. But if the government hires a third-party to solve a temporary staffing issue and the person doing government work is actually an employee of that third party, then that individual does not count for the chart above.  That said, the money the government spent hiring the third-party firm would show up in the public accounts as part of all spending on “professional and spending services.”  And on that front, the PBO notes:

In 2013-14, planned spending on Professional  and Special Services has decreased by 3.5 per  cent to $10.2 billion (Figure 2-5). Estimates for  this spending category have declined to the  lowest share of federal spending since 2010-11

Now, while PBO says spending in FY 14 will drop to $10.2 billiion a year and that will will represent a drop of 3.5%, Treasury Board tells me that spending in this category in FY 13 was $10.03 billion (clearly lower than the PBO number fo FY13). Treasury Board says that in FY 12, spending in this area was $10.71 billion but then shrank by  6.4% in FY 13 to $10.03 billion.

Then there’s spending on information technology  …

The PBO says that the government manages 400,000 “end-user devices” — basically personal computers and related computer hardware  — which works out to about 1.5 devices per employee. Those devices cost an average of $310 a year but the government is committed to bringing that down to $290 a year.

The PBO notes it asked the government for information as to who it’s going to get from $310 to $290 a year but the government did not provide it with that information. Still, the PBO says those cost savings would be in line with what national governments of other countries were able to achieve.


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