'A significant impact on the area's overall economy,' Conference Board predicts
An economic think-tank is forecasting a drop in government employment in the capital region, saying spending freezes could lead to a decline of 6,200 public service jobs in 2011.
The Conference Board of Canada says the expected 3.9 per cent reduction in public administration jobs will hold back other industry sectors in the region next year.
"The federal government has announced a departmental spending freeze that will restrict growth in the local public administration sector. And since this sector accounts for one-quarter of Ottawa-Gatineau's total output, the slower growth will have a significant impact on the area's overall economy," according to the report, released Wednesday.
"Therefore, the region will pay a price for the 2008–09 recession through federal public service job cuts (mainly through attrition) in the coming years."
The report predicts public administration jobs in the capital area, currently numbering about 160,400, will decrease more modestly in 2012, by 1,900 jobs, before bouncing back slightly in 2013 with an increase of 700.
The Conference Board predicts a slight rise in total employment in Ottawa-Gatineau of 0.4 per cent and an expansion in the region's overall economy of 2.5 per cent in 2011.
Both those predictions represent a decline from positive projections for this year, when the region enjoyed what the report called a "sharp turnaround" following the global economic downturn in 2009.
The capital region is on pace to grow this year at its fastest rate in a decade, rising 3.7 per cent, the report said. The economy got a boost this year as construction work funded through federal infrastructure spending kicked into high gear, augmented by a Canada-wide return to growth.
But this year's federal budget included a pledge to lock salary and operating budgets at their 2010-11 levels until 2013, and construction spending is expected to wind down.
Union contract talks open early
The federal government raised a few eyebrows last week when Treasury Board President Stockwell Day put forth a proposal to the two largest public-sector unions — the Public Service Alliance of Canada and the Professional Institute of the Public Service of Canada — to begin early negotiations on collective agreements.
"In this period of fiscal restraint, I believe early discussions between bargaining agents and the employer are important to achieving financial predictability for the government as well as certainty for employees," Day stated.
PSAC accepted the proposal and was to begin negotiations this week, while PIPSC's board agreed last Friday to allow any of its bargaining units that wish to engage the government to begin talks.
PIPSC president Gary Corbett expressed reservations about the government's intentions. He said his union was contacted only after the government had already reached out to PSAC, and other unions weren't approached at all.