Government employment reached its highest level in 10 years in 2004 and it’s likely it will soon surpass the peak hit in 1992, analysts said yesterday.
Statistics Canada reported 2.7-million people were working in federal, provincial and local governments in 2004, up from a trough of 2.5-million in 1999, and only 10,000 off its peak in 1995.
Fifty-two percent were employed by the provinces or territories, 34% by local governments and 14% by the federal government.
Slightly more than half worked for a health or social service institution, one-quarter were in other civil service positions and the remainder worked for colleges and universities.
Analysts say the numbers are sure to rise with Paul Martin’s Liberal government striking a deal with the New Democratic Party to embellish an already rich federal budget, and with most provincial governments spending freely.
Some expressed concern the federal government could be returned to the same position it was in when Paul Martin was finance minister in 1995: having to reduce the civil service to dig itself out of deficit.
“Many of these governments that are undertaking large spending increases just did not learn the lessons of the mid-1990s,” said Jason Clemens, policy analysts with the Fraser Institute, a conservative think-tank.
“Premier McGuinty is an example in Ontario where he’s increasing spending at a time when they’re already in deficit and their revenues are well above expectations,” Mr. Clemens added.
“Rather than dealing with some of the structural issues, particularly on the manufacturing side, this is a government that wants to expand the size of government.”
With doctor shortages still rampant across the country and waiting times for surgery still long, despite the increased spending and hiring, analysts wonder when Canadians will see results.
“How do we reconcile the fact that we are the second-highest spender of the universal healthcare countries of the OECD while we have very poor access to doctors and technology and our healthcare outcomes are moderate to poor?” Mr. Clemens said.
The Fraser Institute believes more private sector involvement in the healthcare sector would lead to a more efficient system with better outcomes.
Analysts also said public-sector hiring has been outstripping private-sector job creation in recent years.
Companies across the country have been reducing their employment rosters in order to compete with a dollar that has risen to US80 cents from US62 cents in the last three years.
In its April labour-force survey, Statistics Canada said employment in the public sector soared 3.8% from the same month in 2005, compared with only a 0.8% rise in the private sector.
“The public sector would seem to be the place to go if you’re looking for a job right now,” said David Wolf, head of Canadian economics for Merrill Lynch.
While public sector hiring has been surging, it still makes up a smaller percentage of overall employment than at its peak in the 1990s. That was a high of 24% in 1992 compared with 18.5% last year.
© National Post 2005