Austerity Measures Cutting Deep, says Union Boss

Thousands more public service job cuts in the works
By Justina Reichel
Justina Reichel
Justina Reichel
April 10, 2013 Updated: April 10, 2013

The federal government’s austerity measures are having a detrimemtal effect on workers and the economy, especially in light of record job losses last month, says the head of one of Canada’s largest unions.

Ken Lawenza, president of the Canadian Auto Workers Union, which represents 193,000 members across Canada, says government spending and program cuts are severely impacting the country’s workforce.

He says there’s a need for ongoing direct investment to put two million Canadians back to work, which would in turn boost the economy.

“We need to get people working,” he says.

“As long as we are in an unstable job creation environment we can’t rebound, because we need jobs for good public services. … We think the concentration should be on jobs, job creation, and that the government should be spending at this particular time versus the status quo of ongoing austerity.”

Lewenza’s comments come on the heels of depressed job market numbers for March. Statistics Canada reported that the economy shed nearly 54,500 jobs last month—the worst month for employment since 2009—erasing the unexpected national job gains in February.

The job losses, primarily from manufacturing and public administration, also pushed the unemployment rate from 7.0 to 7.2 percent.

Lewenza says the 2013 budget unveiled last month missed the opportunity to create more jobs, especially through public infrastructure projects.

“There’s a whole lot of public services and infrastructure that have to be improved,” he says.

Budget 2013 focused heavily on controlling spending in order to balance the budget by 2015.

According to the Fraser Institute, spending reduction is a less risky approach to balancing the budget. A Budget 2013 analysis posted on the institute’s website notes that stimulus spending can be a slippery slope.

“One of many problems with stimulus spending is that the spending never stops. It simply becomes the base from which future spending grows, and that’s essentially what happened in Canada.

“Had the federal government returned to its prior spending levels, the 2013-14 deficit would come in at about $3.1 billion rather than its expected $18.7 billion. And deficits don’t come in isolation: higher deficits become higher debt levels, and higher debts become a greater burden for the population to pay off in future years.”

More Public Service Job Cuts Coming

Meanwhile, a new report from the Canadian Centre for Policy Alternatives (CCPA) says many more public service jobs will be cut in the coming years than originally estimated.

According to the CCPA analysis, nearly 29,000 federal public service jobs will be cut between 2012 and 2016 due to government austerity measures. By 2016, the CCPA estimates, the total number of people working for the federal government will have fallen by 8 percent, almost double the 4.8 percent figure reported in Budget 2012.

“Cuts within large federal departments are not coming from the ‘back office.’ Instead, most of the job cuts in big departments are coming from programs that deliver services to Canadians,” says CCPA senior economist David Macdonald, who examined over 180 departmental Reports on Plans and Priorities in order to estimate the employment cuts.

“Human Resources and Skills Development Canada will experience the largest loss of positions, totalling over 5,700 by 2016. While HRSDC is a large department, this cut will reduce the department’s workforce by 24 percent,” says Macdonald.

“At the program level, the Social Development program supporting homelessness initiatives will suffer a 62 percent cut to its staff.”

Statistics Canada will be the hardest hit of the larger federal departments and lose over one-third (35 percent) of their staff, according to the report. Veterans Affairs is scheduled to eliminate almost one-quarter of its staff (24 percent). Both the Canadian Food Inspection Agency and Aboriginal Affairs and Northern Development Canada will lose one in five of their employees.

“Veterans Affairs will be cutting a third of the staff to the program that supports disability, death, and financial benefits for veterans and 20 percent of the staff to Veterans Health Care,” says Macdonald.

“It is only after four austerity budgets that there are finally some answers about what services departments are going to cut. Unfortunately, those answers come far too late to decide whether cutting staffing for veterans health care, for instance, is worth doing in order to balance the budget a year or two early.”