It’s amazing the mileage conservative think-tanks get from some selective crunching of StatsCanada numbers. Back in the fall of 2014 the Atlantic Institute for Market Studies put out a report stating what seems obvious – the Nova Scotia government could save money by getting rid of 14,000 public sector workers. (Stay tuned for the forthcoming report revealing that the province could save a billion or so by closing the schools).
Is cutting 14,000 provincial public sector workers too radical for you? Not if you accept the report’s inference that we should be able to get by with the same number of provincial public sector workers per population as the national average.
Using data taken mainly from StatsCanada’s “Labour statistics by business sector industry and non-commercial activity,” AIMS estimated that Nova Scotia had 99 public sector workers for every thousand population in 2013, compared with the national average of 84 per thousand. Getting to the national average – and what could possibly be wrong with that? – would mean shedding the 14,000 provincial and municipal workers. According to AIMS, those 14,000 workers – average wage $60,000 per year – accounted for $836 million in government spending in 2013.
To be fair, the report did not try to hide the fact that the volume of cuts contemplated would likely involve not just the much-maligned paper-pushing bureaucrat, but also front- line workers such as teachers, nurses, police, fire fighters and nursing home attendants. It also pointed out that Nova Scotia’s ratio of public servants to population was just the fourth highest in the country, and that Ontario, Alberta and British Columbia – the only provinces with significantly lower ratios than Nova Scotia – may be benefitting from economies of scale. And it did not actually claim that the cuts could be accomplished without diminishing the quality of public services.
“These are cold, hard facts,” Shaun Fantauzzo, policy analyst for AIMS, told the Chronicle-Herald at the time of the report’s release. “We simply wanted to measure the size and the cost to confirm … the theory that Atlantic Canada’s public sector is larger, and the data shows that.”
Fine, but the facts laid out by AIMS are seriously lacking in context. For starters, the notion that Nova Scotia and other smaller provinces in Atlantic Canada and elsewhere have a larger public sector is hardly a “theory.” It is a well-established fact. The same StatsCanada data base AIMS used for its report shows that in 2000 Nova Scotia had the third highest ratio of public sector workers to population, behind only Saskatchewan and Manitoba. Prince Edward Island was fourth, followed by Quebec (the exception to the economies of scale “rule”), Newfoundland and New Brunswick. Only Ontario, B.C. and Alberta were below the national average of 76 provincial public sector workers per thousand population.
Aside from the fact that the size of Newfoundland’s royalty-enriched public sector leapfrogged over several provinces, including Nova Scotia, there was nothing much new in the AIMS report. Indeed, Nova Scotia’s variance from the national average was 15 percentage points in 2000 – 91 versus 76 per thousand – just as it was in 2013. And as noted, we “improved” from third to fourth highest.
But a report laying out such “cold, hard facts” – new or not – is bound to find an audience in today’s public servant-bashing environment. Thus it was that blueberry and telecommunications baron John Bragg, erstwhile member of the Ivany commission, captured headlines last month when he cited the AIMS report in a speech to none other than an AIMS-sponsored discussion of the Ivany report. According to media dispatches, Bragg even had advice on the best way to spend the $836 million that would supposedly be saved – $300 million to reduce the deficit and $500 million to pay down the debt.
Bragg did acknowledge that besides cutting costs and reducing debt, the province also needed to increase revenue with a long-term economic plan. Of course, by taking his advice, economic planners would begin with a handicap of 14,000 new unemployed providing a lot less in revenue to government by way of taxes. But that didn’t seem to matter to Bragg or his echo chamber on the editorial pages of the Chronicle-Herald. The newspaper carried an editorial praising Bragg’s speech, and columnist Bill Black used it as a stick to beat the drum for his favourite cause, cutting jobs and wages of those who work directly for the provincial government.
It is tempting to dismiss Bragg’s AIMS-inspired proposal as a crock. It is highly unlikely that, even if they wanted to, provincial and municipal governments would cut 14,000 jobs from the public sector. The impact on services would be severe and the effect on the economy from all of those lost jobs would offset much of the supposed savings. However, given the prevailing zeitgeist, it is safe to assume that the AIMS report and Bragg’s endorsement will be used to justify less ambitious forays against the public sector in the months ahead. So it is useful, for the sake of context, to marshall a few additional facts against the impending onslaught on public servants and public services. These facts are available from the same StatsCanada data base that provided grist for the AIMS mill.
- Provincial government jobs accounted for only 14% of provincial and local public sector jobs in Nova Scotia in 2013. Education accounted for 38% of jobs, health 34% and municipal and aboriginal government 14%. Any significant reduction in public sector jobs would therefore have to include front line workers in health and education.
- Despite Bill Black’s preoccupation, the number of those who work directly for the provincial government increased by only five per cent between 2000 and 2013 – a numerical increase of 600. The largest job increases were in health (18%) and municipal/aboriginal government (26%), while the number of education jobs dropped by 1.1%.
- Despite Black’s preoccupation with wage restraint, the StatsCanada data show that most categories of public sector jobs in Nova Scotia pay significantly less than the national average. The exceptions are hospital and nursing home jobs, which pay 99% and 93% of the national average, respectively. At the other extreme, municipal jobs pay 79% and education jobs 82% of the national average, slightly below the 83% of the national average prevailing for all jobs – public and private sector – in Nova Scotia. The fat cats who are paid directly by the province earn 85% of the national average (and may be sorely tempted to move to Alberta where provincial government workers are at 137% of the national average).
- Surprisingly, despite years of attacks on the public sector, the number of provincial public sector jobs in Canada continues to grow at a faster pace than our population. Nationally, the increase from 76 to 84 public sector workers per thousand population (10.5%) was greater than Nova Scotia’s increase from 91 to 99 per thousand (8.8%). Three provinces – Newfoundland, Manitoba and Ontario – grew their public sectors at rates above the national average.
- Among the six provinces besides Nova Scotia that were below the national average rate of growth, New Brunswick led the race to the bottom, increasing its ratio by less than four per cent, from 81.9 in 2000 to 85.0 per thousand population in 2013. Indeed, between 2006 and 2013, the ratio actually fell to 85.0 from 87.0.
New Brunswick is praised in the AIMS report for restraining the growth of its public sector and moving the province close to the national average. Left unmentioned is the fact that this restraint has not paid off for our northern neighbour, either in fiscal terms or in employment. While keeping the lid on public sector job growth, the province saw its net debt increase by 35% between 2009 and 2013 (Nova Scotia’s was up only 13% over that period). As for jobs, the private sector failed miserably in filling the gap left by a diminished public sector. Between 2006 and 2013, more than 750 provincial public sector jobs were lost in New Brunswick. Over that same seven-year period total employment in the province increased by only 1,300, with more than half of that growth the result of an increase in military – i.e. federal government – jobs. At most, the private sector created 1,300 jobs. Meanwhile, Nova Scotia saw an increase of more than 15,500 jobs over that period, one-third in the public sector and two-thirds in the private sector. Riddle us that one, Mr. Bragg and your allies at AIMS and the Herald.