Tackle public sector bloat now

Commentary, Joseph Quesnel

The next Manitoba provincial election is expected in April 2016. With this election on the horizon, it is important to understand the fundamental problem confronting this province.

That problem is the size and cost of our huge public sector. For the average Manitoban this means an additional tax burden.

According to a January 2015 study by the Frontier Centre for Public Policy, Manitoba's public sector is indeed unusually large compared to the national average. In fact, as a percentage of jobs in the province, Manitoba has the second largest public sector in the country at 23.35%, second only to Newfoundland and Labrador at 27.5%.

The civilian public sector includes all government employees at the federal, provincial and local levels, excluding defence and Crown corporation workers.

When it comes to the sub-national public sector, or the number of provincial and local government employees, Manitoba again has the second largest at 21.6%. Again, only Newfoundland and Labrador is larger with 25.2%.

However, measuring the public sector relative only to the employed workforce has its limits. The study found that another useful metric is the size of the sub-national public sector relative to population. To do this, we used Statistics Canada data to measure the size of sub-national public sector employment per 1,000 residents. The national average per 1,000 residents was 84 employees per 1,000 residents. Manitoba had the highest at 114 employees per 1,000 residents.

Now it is important to figure out the cost of this unusually large public sector. These large salary bills are a significant cost to the taxpayers of Manitoba. Manitoba has 30 additional employees above the national average per 1,000 residents. This comes out to 37,788 total additional employees in the sub-national public sector. Finally, this translates into $2.154 billion in additional spending on the public sector bill in Manitoba.

This large bill represents a significant expense for Manitoba. As a province already dealing with large debt and deficits, this public sector bill only compounds the problem. Moreover, a recent joint study by the Atlantic Institute for Market Studies and the Frontier Centre showed that Manitoba has seen diminishing equalization payments over recent years.

All these problems acting together present a significant challenge for our province.

There is obviously some space for savings in Manitoba by restraining the growth of the public sector wage bill.

This exercise also doesn't have to be very radical or draconian either. In 2023, Manitoba's population is expected to grow to 1.4 million, up from 1.26 million in 2013. If the province were to maintain the number of provincial and local government employees at its 2013 levels (144,000), in 2023, Manitoba would have 101 sub-national public sector workers per 1,000 residents. Just by maintaining the number of sub-national public sector workers at 2013 levels, by 2023, the ratio of sub-national public sector workers to residents would be lower than it was in 2013.

Here's to hoping our politicians have the courage to tackle this problem before it gets out of control.

This op ed was originally published by The Winnipeg Sun on Monday, March 23, 2015: http://www.winnipegsun.com/2015/03/23/tackle-public-sector-bloat-now