A view of Centre Block on Parliament Hill in Ottawa, the seat of Canada’s government, in a file photo. (Matthew Little/The Epoch Times)
A Montreal think tank says the federal government could save $10 billion by reducing 64,000 public service jobs.
The Montreal Economic Institute (MEI) made the recommendation in a pre-budget brief released on Aug. 7. It urges the government to follow the approach of former Liberal Prime Minister Jean Chrétien, saying his government reduced the civil service by 17 percent over five years.
“Canada’s economy is stagnant, and its fiscal outlook is grim,” said Gabriel Giguère, senior public policy analyst at the MEI. “These are not just numbers on a page; this is debt taken out in our names, adding pressure on families already reeling from recent inflation.”
Ottawa could make a “significant contribution” to balancing the budget if it cut the jobs, MEI said.
It noted that the public service has increased by 38 percent since 2015, adding about 100,000 civil servants to the public payroll.
MEI’s paper recommends Ottawa start by not renewing employee contracts.
The brief also said the government needed to reduce all spending to return to balanced budgets, recommending changes that include reducing regulations, getting rid of programs like the Canada Dental Care Plan, and the privatization of Canada Post.
“So as not to place an undue burden on future generations, Canada’s new government must make fiscal discipline one of its priorities for the next budget,” the MEI brief said.
The Canada Dental Care Plan could cost up to $13 billion over the first five years and $4.4 billion each subsequent year, MEI said in the brief. It says the “program contributes a significant chunk to the federal deficit.”
MEI also said the federal government needed to put an end to business subsidies, saying it positions the federal government as a “central planner” of the economy, a role that Ottawa has “no capacity to carry out successfully.”
The brief noted the failure of some high-profile subsidized companies like Northvolt. Ottawa and the province of Quebec invested billions to attract the company to Canada. The battery cell maker filed for bankruptcy in Sweden in March.
“This type of economic policy entails a significant opportunity cost for the Canadian economy, as it indirectly necessitates tax increases in order to finance these subsidies,” MEI said.
MEI also recommended the government privatize Canada Post.
“This change would solve an organizational and financial impasse by freeing the public from the burden of risk associated with Canada Post’s potential default on its loans,” the brief said.
The federal government needs to reduce regulations to spur to economic growth, according to MEI, adding that it also needed to do more to profit off of natural resources for the country’s prosperity.
“Our advice is for Ottawa is to get out of the way,” Giguère said. “Our stagnating standard of living proves that government expansion across all areas does not produce economic prosperity, and doubling down on this approach will only make matters worse.”