Stimulus, defence fuelling federal public-service growth

NationalPost.com – news/canada/politics
Sunday, Feb. 6, 2011.   Amy Minsky, Postmedia News

Even without the spending burst of the economic stimulus program, Prime Minister Stephen Harper has substantially boosted federal government expenditures during his five years in office, and added thousands of bodies to the federal public service.

Although Mr. Harper recently conceded he’s increased spending and jobs during that period, the prime minister has also defended the growth by saying it has focused on specific areas such as defence and consumer safety, which top the Tory policy agenda.

“For example, this government has been expanding the size of the military,” Mr. Harper told the CBC in a recent interview. “We’ve expanded, hired more police officers . . . .” The government has also shored up product- and consumer-safety laws, and bolstered its inspection powers, he said.

It’s all true, but it’s not the entire story.

According to publicly available government documents, over the five years that the Conservative government has been in power, the Canadian Forces have added 7,754 people to their regular forces and reserves. That’s an expansion of 8.7%, bringing the total to 96,675 people at the end of the 2009-2010 fiscal year.

During the final year of Paul Martin’s Liberal government, 2005-2006, the Canadian Forces tally was 88,921.

Over the Harper years, the number of RCMP officers has increased more than 16%, climbing to 24,445 from 20,936.

And employment in the departments receiving funding for federal food- and consumer-safety initiatives, Mr. Harper’s other stated priority, also grew slightly. Health Canada added the equivalent of 1,212 full-time jobs (called FTEs), for example, while the Canadian Food Inspection Agency added 833. The Public Health Agency of Canada brought in another 757, and the Canadian Institutes for Health Research added 72.

So far, so good for the Tory agenda. But defying conventional thinking about Conservative devotion to smaller government, there was growth beyond these priority areas.

Overall, the federal public service — which includes civilian employees at National Defence and the RCMP, but not the military members and police officers already counted — swelled by 33,023 people, slightly more than 13%, over five years.

Relative to the growth in Canadian population under the Harper government, the federal public service grew by 7.8%.

Some departments grew even faster than the prime minister’s priorities. For example:

• Human Resources and Skills Development Canada increased its FTEs by more than 8,000, a growth of 47%;

• Canada Border Service Agency took on nearly 2,662 FTEs (22% growth);

• Indian Affairs got 1,280 (32% growth);

• Citizenship and Immigration added 969 (28% growth).

“There were several years of relatively slow growth in the public service, years ago,” said Finn Poschmann, a research executive at the C.D. Howe Institute, a conservative-leaning think-tank. “So rebuilding the public service was necessary. But the pace of growth is obviously unsustainable.”

Hiring, however, is only one measure of government growth.

Federal program spending during Mr. Martin’s final year in power — 2005-2006 — stood at $175-billion. By 2009-2010, under Mr. Harper, it had climbed to $245-billion.

Economic analysts consulted by Postmedia cautioned that such figures should be gauged against overall growth in the Canadian economy. The question they ask is: as the economy grows, does the size of government grow at the same rate, more quickly, or more slowly? Both the left-leaning Canadian Centre for Policy Alternatives and the right-leaning Fraser Institute recommended using this method to gauge government growth.

Postmedia’s analysis found that even relative to growth of the Canadian economy, program expenses — which include departmental program spending as well as major transfers of money to individuals and other levels of government — increased more than 25% over five years.

Some of that growth was through transfers to provinces, which includes money from Ottawa to help provinces pay for health care, education and other services. Although the boost occurred during Mr. Harper’s watch, it was aided both by increased health transfers established under Mr. Martin and revised equalization payments established under Harper.

Under Mr. Harper, program spending saw its most significant jump between 2008-2009 and 2009-2010 — from 13 to 16% of GDP — when the government was injecting money into the economy to battle the recession.

“The growth is mostly stimulus spending,” said Charles Lammam, a senior policy analyst at the Fraser Institute, a right-leaning think tank. “But government has to ask itself whether the spending achieved what it set out to do.”

Besides, the Conservatives started increasing government spending almost as soon as they came in, he said.

“It’s a pretty simple story,” said C.D. Howe’s Poschmann. “Spending did grow pretty sharply. But it wasn’t just defence.”

As expected, spending in Mr. Harper’s identified priority departments expanded relative to growth in GDP.

For example, the central food- and consumer-safety departments — the Public Health Agency, Health Canada, the Canadian Institutes for Health Research and the Canadian Food Inspection Agency — increased their spending by 77.5%, 16%, 10% and 9.6% respectively between 2005-2006 and 2009-2010, relative to the size of the economy.

During that time, spending at the RCMP increased by more than 45% relative to GDP, and the Department of National Defence boosted its expenditures by 21% relative to GDP growth.

However, the Harper government has grown in areas other than its identified priorities. A snapshot:

• Fisheries and Oceans spending increased by nearly 19% from 2005-2006 to 2009-2010 relative to GDP growth;

• Indian and Northern Affairs Canada increased by 14%;

• Citizenship and Immigration increased by more than 52%;

• Human Resources and Skills Development Canada grew by nearly 18%.

It wasn’t all about expansion, however. Some federal departments shrank their spending since Mr. Harper’s Conservatives took office. For instance:

• Justice decreased its spending relative to GDP by more than 4%;

• Finance decreased by more than 11%;

• Canadian Heritage spent about 6% less than in Martin’s last year in office.

David Macdonald, a research associate at the Canadian Centre for Policy Alternatives, argued that if the two years of stimulus spending were not taken into account, the Harper government actually increased its spending at a lower rate than governments that preceded it.

Recession or not, Mr. Harper has shown a propensity to boost expenditures, Mr. Poschmann said.

“If government would like to avoid growing debt and deficit, it’s going to have to reign in its spending faster than the current plans indicate,” he said. “And they should take a long, hard look at transfers to provinces and growth in public service.”

With files from Kirsten Smith, Postmedia News

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