Byzantine Bureaucracy Leads us Down Road of Ruin

Commentary, Public Sector, Frontier Centre

The academic analysis of public policy often ignores the big issues to study wind power or the impact of 9/11 on cross-border shopping. In contrast, think-tanks sometimes discuss important questions that seldom occur to academics and never to governments.

Last week provided an excellent example. A frontpage story in the National Post, an editorial in the Herald and several op-ed pieces discussed a report by Ben Eisen of the Frontier Centre of Public Policy, a feisty Winnipeg think-tank. Eisen’s report on public administration wage growth over the past decade was especially poignant because it compared remuneration for bureaucrats with that received by private sector employees doing comparable jobs.

The numbers, based on Statistics Canada data, are impressive. Across the economy, wages grew by 30 per cent. Wages for Ottawa bureaucrats increased twice as fast. The wage gap between typical private sector workers and federal bureaucrats increased 250 per cent, from just under $10,000 in 1998 to $25,000 in 2009. If you look at the question in terms of potential money saved had the wages of bureaucrats increased at the same rate as the productive economy, in 2009, taxpayers would have saved $1.6 billion.

For even occasional government-watchers, this cannot be entirely surprising. Over the years, anecdotes have thrown considerable light on the problem. A couple of years ago, for example, a federal program called compassionate care spent $70 million to administer $11 million in benefits. There are regular horror stories published by outfits such as the Canadian Taxpayers Federation calling for linking bureaucratic pay to performance.

The fact is, pay and performance are already linked, at least in one direction. All bureaucrats are eligible for "performance pay," which is to say, bonuses on top of salaries. Unfortunately, there is no policy for poor performance. But because nearly three-quarters of all bureaucrats are at the highest or second highest salary category for their jobs, every one of them is, by definition, superior.

There may be something amiss with such a definition. Late last year, for instance, an unnamed official at the Canada Border Services Agency, the organization responsible for, among other things, keeping pornography out of the country, spent 176 hours over three months surfing the web for porn ads and dispersing nude snaps of himself via his government e-mail account. An official explained that he kept his job because "the employee does not occupy a position that interacts with the general public."

Over the past four years, federal bureaucrats charged $125 million for booze, golf, spa retreats and first-class airfares. Foreign Affairs led the way with $53 million and Environment Canada spent nearly $35 million. The bureaucracy has accumulated an unfunded pension liability of over $208 billion and enjoys an amazing severance package. Recently, the advanced leadership program, run by a part of the government called the Canada School of Public Service, sent 25 bureaucrats across the continent and to Europe, Asia and even Africa to consult with "leading-edge thinkers and companies" for a mere $4 million. That works out to $160,000 a head for three weeks travel.

Over the past decade, the average number of days bureaucrats take off each year has increased by 40 per cent. Compared to private sector workers, bureaucrats fall ill nearly twice as often. "Uncertified" sick leave, that is, absence without a doctor’s note, has increased 74 per cent. A Carleton University professor explained this was because of stress, demoralization and hard work. Laziness was not mentioned.

One explanation, advanced by the head of the bureaucrats’ union, John Gordon, was that "the workload increases every day." Perhaps the economic value of the skills and experience of these people are worth it.

Eisen suggested another explanation. Public sector unions are able to extract what economists euphemistically call "rents" (and the rest of us call extortion) because the public sector strikes are a big problem for governments. So they buy labour peace with taxpayers’ money.

Edward Gibbon attributed one cause of The History of the Decline and Fall of the Roman Empire to the growth of a parasitic bureaucracy. That is how the term Byzantine gained its pejorative connotations. Our Byzantine bureaucracy has pushed the country a long way down that Roman road where we really don’t want to go.

Thanks to the Frontier Centre for reminding us.