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Uzelman: The burgeoning public service is damaging longer-term employment growth

New column from Bruce Uzelman

~BW Uzelman

The federal public service has ballooned under the Liberal Government, as has the provincial public service in British Columbia under the NDP Government. By contrast, in the two largest cities in the BC Interior, Kelowna and Kamloops, the City staffing levels are models of restraint.

From 2010 to 2015, the Harper Conservative Government shrunk the core public service by almost 10 percent. Since the Trudeau Government took power, according to data from the Globe and Mail, the public service has increased by about 30 percent, from under 200,000 in 2015 to over 250,000 by March 31, 2022. Similarly, the BC public service, over the same period, increased by about a third. Compare that to the City of Kelowna, which increased it’s full-time employees from 937 to 1019 or only 8.8 percent, from 2017 to 2021. The City of Kamloops had under 800 employees in 2021.

Despite headlines claiming strong growth in employment, points out Ben Eisan, an economist at the Fraser Institute, this isn’t what it first seems. The Canadian economy produced 422,900 jobs from February 2020 to July 2022 (since the beginning of the pandemic). However, a shocking 86.7% of these jobs were in the government sector. In fact, the number of existing private sector jobs, adjusted for increased population, still are lower than what they were in February 2020. Eisen concludes, “The government sector is adding jobs quickly, while job creation in the rest of the economy is sputtering.”

Eisen argues that the government-driven employment recovery is unsustainable. Studies have shown that the present level of debt for provincial governments is not viable, he says, and additional debt will make it difficult for both federal and provincial levels of government to balance their budgets.

Perhaps, more troubling than the private sector’s lack of job creation, is that it is often unable to fill vacant positions. Statistics Canada reported recently that there were over one million job vacancies in June 2022 for the third consecutive month. Vacancies were up 39% year-over-year in accommodation and food services and 32% in retail trade. Vacancies remain “elevated” in construction, manufacturing, professional and technical, transportation and warehousing, and finance and insurance. (High vacancies remain in health care and social assistance, too.) The private sector appears to be hobbled by a shortage of workers.

Governments, both federal and provincial, clearly need to prioritize expanding the economy’s work force, as the population ages. Immigration policies and temporary worker programs need to be further enhanced to increase workers available. As well, the Fraser Institute, in “Barriers to the Labour Force Participation of Older Workers in Canada”, identify many constraints built into public pensions, and associated taxation policies, which discourage the older population from working. Governments should examine which of these can be modified to support seniors’ employment.

So, Canada faces a number of problems: a rapidly expanding federal and provincial public service, a private sector struggling to create and to fill jobs, and a finite labour force. A bloated and unaffordable public sector has absorbed many of the job seekers. Furthermore, our economy is plagued by painfully low productivity growth, primarily caused by a lack of business investment and a poor investment climate. These problems can all be managed with appropriate government policies, and some government belt-tightening.

Bruce

Bruce W Uzelman

I grew up in Paradise Hill, a village in Northwestern Saskatchewan. I come from a large family. My parents instilled good values, but yet afforded us, my seven siblings and I, much freedom to do the things we wished to do. I spent my early years exploring the hills and forests and fields surrounding the village, a great way to come of age. My parents owned a successful general store. My siblings and I were required to help out in the business, no choices allowed there!

I attended the University of Saskatchewan in Saskatoon. I considered studying journalism at one point, but did not ultimately pursue that. However, I obtained a Bachelor of Arts, Advanced with majors in Economics and Political Science in 1982.

My career has consisted exclusively of small business, primarily restaurant and retail. I was originally based in Alberta, and then BC, first in Summerland, then Victoria and finally Kelowna (for over 20 years). I was married in Alberta, and we have two daughters, who have returned to Alberta as adults for career reasons, as did my now ex-wife. My daughters are successful, and now have families of their own.

I have maintained a healthy interest in politics throughout my adult years, and wish to put that and my research skills to work as a political columnist.

Contact: urbangeneral@shaw.ca

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