Time for a diet

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After years of criticizing the government for squandering its oil revenues, it’s hard to avoid the temptation to say “we told you so.”

But the fact remains, this province now finds itself short on royalties and unable to sustain the extra public services and paycheques it has created over more than a decade of good times.

On Monday, the government announced an across-the-board hiring freeze. It’s the opening gambit in a plan to mitigate up to $4 billion in deficits over the next three years.

The unions, predictably, are restless. Canadian Union of Public Employees (CUPE) representative Wayne Lucas calls it an “extremely provocative” move that interferes with contract negotiations.

Carol Furlong is a little more willing to compromise.

“At the end of the day, I guess, there’ll be a price to pay and that price will be that the services will be somewhat reduced and it will take longer to get things done,” said Furlong, head of the Newfoundland Association of Public and Private Employess. “But from our perspective, if that means that we can save jobs, then that’s a better alternative.”

If Premier Kathy Dunderdale hopes to trim government ranks by attrition, however, it’s going to take a while.

In a Fraser Institute study of labour markets in Canada and the U.S. released last year, Newfoundland scored highest overall in terms of the ratio of public over private jobs.

The study found that public-sector employment represented 29.5 per cent of total employment — nearly double that of Alberta.

This is not a good thing.

But it’s not just a Newfoundland problem.

The Atlantic Provinces Economic Council noted in January 2012 that between 2001 and 2010, Atlantic Canada as a whole created nearly four times as many jobs in low-wage industries than it did in high-wage industries. A net increase of 11,000 new jobs in high-wage industries was primarily boosted by an expansion of the public sector.

In a nutshell, an explosion in public-sector jobs has masked a relatively modest growth in high-level private sector employment. That leaves government jobs significantly more vulnerable.

The premier has not helped the government’s image in this respect. Over the past year, she’s announced a steady stream of senior appointments, including one only hours after the announced clampdown on hiring.

The unions are right in one respect: the government has been sending mixed signals for months.

But they’re also right to be nervous. Because no matter how you slice it, the civil service is a bloated beast. It’s long overdue for some serious dieting.

Organizations: Union of Public Employees, CUPE, Newfoundland Association of Public and Private Employess Fraser Institute Atlantic Provinces Economic Council

Geographic location: Atlantic Canada, Newfoundland, U.S.

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Recent comments

  • Steve
    February 21, 2013 - 01:30

    Alberta has a population seven times that of Newfoundland. Is the problem the numerator (too many government workers) or the denominator (not enough people?

    • david
      February 21, 2013 - 09:57

      Newfoundland only has a government economy ---- much like the "centralized planning" system of the former Soviet Union, but without even a "Lada" to show for it.

  • Wondering
    February 20, 2013 - 15:25

    John Smith says about what the PCs have done, such as ..." the money to help people heat their homes". According to a presentation by Adams to the PUB on the Nfld Power Application, other jurisdictions are spending 5 times more and achieving 10 times more than here in energy savings by rebates to help customers reduce their energy consumption and save on their energy bills.And neither the Consumer Advocate nor Nfld Power contradicted those figures!

  • John Smith
    February 20, 2013 - 13:36

    Nah...let's throw caution to the wind...call up the unions...tell them they can have whatever they want...how much guys? 20%30% 40%...extra severace? More time off...whatever you want. Schools and hospitals that were falling down around our ears when the Liberals were in power...forget them right...all the seniors long term care facillities that the PCs built nah we didn't need them, the schools in Labrador, in Paradise all wasted money, the money to help people heat there homes, free insulin pumps, pills for seniors lower taxes...forget all that right...give me a BREAK!!

    • Eli
      February 20, 2013 - 14:25

      Smith, you left out Nalcor. What an oversight.

  • Eileen
    February 20, 2013 - 13:00

    I can only laugh!!HAHA When Danny came home with the money everyone had their hand out . .Listening to the public servants - you would think they were the only backs that the hard times rested on - they sarficed so much!! My foot!!! I lived and worked in the private sector during the hard times and let me tell you....when the price of everything went up - my company did not look at me and say "becaseu the government is raising the price of everythin we want to give you a raise to offset the cost...not likey - they expected me to show up for my job and how I got there was my problem. Left up to the NDP we would have been paying for everything!! You people have a very short memory - when the Liberals were in power - the political appontments went on ....and we did not have the money to pay for them!!!! THAT IS WHY THE TEACHERRS PENSION FUND WAS OWED $2B....the Liberals used the pension money the pay the salarys of their chosen cronies.

    • Corporate Psycho
      February 20, 2013 - 14:25

      Eileen/GodGuardTheeNL, I just listened to Minister Johnson on Paddy Daly. She to was blaming previous Liberal Governments for the current overspending debacle. I think that excuse is a bit much at this point. Reeks of desperation.

  • Maggy Carter
    February 20, 2013 - 11:53

    Yes, how very sad that the last twenty years has seen such a resurgence in this province's reputation for squandering its natural resources. Our economic history both pre and post confederation is littered with greed, corruption, gross negligence and missed opportunities. We hoped the whirlwind romance with Danny Williams might have broken that pattern - and at least for a short while he showed some promise of doing so. He held the federal government to account - albeit at a price and with mixed results. He also insisted on a fair shake from multinationals. But then he reverted to true Newfoundland type. We witnessed shameless pork barrelling, political partisanship and patronage. There was the very costly, still unexplained Abitibi blunder, but his real swan song was a quickly concocted scheme that could give us the greatest boondoggle in Newfoundland history - Muskrat Falls. Then halfway out the door to pastures made even greener by his own government policies, he annointed a successor – one, unfortunately, who has proven herself unequal to the task of running a province. Never one to question the wisdom of government largesse, the public service is now paying a price for that silence. Before it’s over however there will be enough economic grief to go around for everyone.

  • Ray Norman
    February 20, 2013 - 09:52

    Can't wait for 2015 so we can get rid of all these political appointments and to take Paul Lane and his crew with them.

    • Paddy
      February 20, 2013 - 11:26

      I'd lay dollars to donuts all those "political appointments" carry guaranteed minimum 5-year contracts. We're stuck with 'em along with the Muskrat debt, excluding Simms at NL Housing of course, he's a bad penney we can't get rid of.

    • Too funny
      February 20, 2013 - 12:07

      They will only be replaced with the next generation of appointments. Nothing changes.

    • Mr.U
      February 20, 2013 - 13:20

      The entire world lie,steal & cheat...the only ones who complain are those who are not that good @ it.

  • attawapiskat baymen
    February 20, 2013 - 08:15

    Why in this day and age has tom, jerry and cathy dunderdale, after all these years with our oil money find ourselves in this finanicial ruin. Are we now in the finanicial state that the attawapiskat first nation found themselves in, per capita of course. This is the post Muskratfalls era and if the power is in our hands then where's all the money gone.

  • Eli
    February 20, 2013 - 07:53

    Government spin is it's all excessive union jobs. I beg to differ. The Newfoundloand pork barrel has never been so full of slop at the top.

  • Steve
    February 20, 2013 - 07:38

    I beg to differ. A figure that represents a percentage of total employment doesn't tell you anything. What are the employement numbers in Alberta vs. NL? We have very different economies. Richard Alexander has also been comparing us to other jurisdicitions. The problem for us is we've only got half a million people. For every office that provides a public service, there is a professionally trained expert or core of experts without whom the program couldn't run. You need just as many laws in NL as you do Ontario or Alberta, and for each of these laws you need someone with expertise, someone who can draft the law, someone who can put it in practice, and someone who can oversee it. Could we manage with a few less bodies? Can we find efficiencies? Certainly, but the public service is far from "bloated". The only bloating I see is at the political level with political appointments. Instead of across the board cuts, why doesn't someone propose a particular program or service that should be eliminated completely? That way, you'll really see what the impact is. Richard Alexander won't do that, because he will quickly get away from incomparable, misleading statistics into the realm of real impacts on real citizens.

  • Corporate Psycho
    February 20, 2013 - 07:26

    "Across-the-board hiring freeze"?? Except for friends and Nalcor. This government is really starting to stink of corruption. We need to take our province back. I wonder what name Paul Lane is using on here today?

    • Scott Free
      February 20, 2013 - 14:55

      go no further than the top of this list....John Smith.

    • Dale Olfstadt
      February 20, 2013 - 15:17

      My guess is John Smith; he's the run of the mill, dime a dozen, brown-nosing, boot-licking Tory koolaid slurper.