Ottawa is expected to spend $151 billion more next year than it did in 2014/15 on the federal public service, says the Parliamentary Budget Officer (PBO).
According to his latest report, PBO Yves Giroux uncovered that federal public service spending jumped nearly one-third (31%) over seven years, adding 80,000 positions — surpassing hiring rates in the private sector.
In 2015, the federal bureaucracy had 257,034 workers in "core public administration" and "separate agencies."
Separate agencies include the Canada Revenue Service, Parks Canada, the Canadian Nuclear Safety Commission, the Canadian Food Inspection Agency and over a dozen others. They exclude staff and some people working overseas.
Also excluded are workers at federal Crown corporations like Canada Post, CBC/Radio-Canada and Via Rail, which generate revenue to cover costs partially.
In 2022, 335,957 people worked as federal public servants — up 30.7% from 2015. Meanwhile, Canada's population only grew by 8.5% in the same period.
Giroux attributed this to unprecedented growth in the public sector and higher wages for full-time public employees. He points out that taxpayers are paying $30 billion more than in 2019 to sustain costly government employees — despite no extraordinary pandemic-related spending.
Three departments and agencies, including the Public Health Agency of Canada, accounted for about half the job gains in 2021. Health Canada, which coordinated the country's COVID response, stabilized their staffing levels by 40% in 2020 for a jump of 941.
The Employment and Social Development Department and Canada Revenue Agency — which collaborated on designing and delivering emergency benefit payments to Canadians — increased employment by 21% and 5.3%, respectively, for a combined total gain of nearly 8,000.
Public Services and Procurement Canada, the government's central procurement agency, also hired more staff as part of efforts to negotiate billions in contracts for personal protective equipment, vaccines, and COVID tests.
"Over the past two years, growth in personnel spending was largely driven by a significant expansion of the public service, accounting for approximately 60% of the overall growth in personnel spending," wrote Giroux.
"While salary increases were the largest contributor in total, spending on pensions, overtime, and bonuses grew faster."
The COVID pandemic partly increased federal spending by 73% to $644.2 billion in 2020/21 before declining by 21% to an estimated $508 billion in 2021/22. However, much of the uptick in spending remained independent of the pandemic, "representing a permanent long-term ramping up of federal expenditure," according to the Fraser Institute.
Personnel expenditures surged $14.4 billion from 2019/20 to 2021/22, primarily fueled by one-time expenses.
"It's most recent and ongoing," said Giroux, who estimated payroll costs will top $50 billion this year. In the fiscal year 2021, Ottawa spent $59.623 billion on personnel costs, including salaries, pensions, benefits and overtime — an increase of $4.438 billion from 2020.
Upon knowledge of the report, the Canadian Taxpayers Federation (CTF) demanded Ottawa demonstrate fiscal responsibility by reining in spending and reducing the size of the federal bureaucracy.
"The Trudeau government needs to take some air out of its ballooning bureaucracy," said CTF federal director Franco Terrazzano. "Struggling taxpayers can't afford more bureaucrats with bigger salaries and bonuses."
According to the taxpayers' group, over 312,000 federal workers received pay raises during the pandemic.
"Taxpayers can't afford to pay billions more to fund a bloated bureaucracy," said Terrazzano. "Members of Parliament must speak out and reject the unreasonable demands of government union negotiators."
According to the PBO report, total program expenses as a share of the economy — excluding public debt charges — are at their highest point in three decades.
"This Liberal government has put their stamp on the state and the economy — they've taken us in a new direction. Even before the pandemic, they had pretty big budgets," Sahir Khan, a former deputy parliamentary budget officer and the executive vice-president of the Ottawa Institute of Fiscal Studies and Democracy, told the CBC.
"The state has gotten bigger. There's no question. They abandoned the Chrétien-Martin-Harper political consensus as soon as they got into power," said Khan.
Federal government expenses in 2014/15 totalled $280.4 billion. Adjusted for inflation, that's approximately $345.5 billion in today's dollars.
Budget 2023 projects total expenses at $496.9 billion in 2023/24. Based on current budgetary projections, Ottawa will spend $555.7 billion in 2027/28.
Since Prime Minister Justin Trudeau first formed the government, Ottawa has doubled its $612.3 billion debt to roughly $1.2 trillion. The cost to service all that debt will cost taxpayers almost $44 billion in 2023 and reach $50 billion in 2027.
The government no longer projects when it will return to a balanced budget, nor has it procured a budget surplus over the past seven years.
While the fall economic statement tabled last November suggested a balanced budget for 2027/28, Freeland dumped that projection to announce billions in new spending.