OTTAWA - The federal government paid $1.2 billion in voluntaryseverance last fiscal year to 91,613 public servants who eitherremain in their jobs, retired or quit on their own - a perk unheardof to most Canadian taxpayers who are footing the bill. Business groups and spending watchdogs say the voluntary payoutsare both "staggering" and "outrageous," considering Canadians inthe private sector are generally only paid severance when they losetheir job - not if they continue working or leave on their own. All told, taxpayers are on the hook for more than $1.5 billion inregular and voluntary severance to 102,589 public servants in2011-12, according to new federal numbers obtained by PostmediaNews. The total severance payout includes the $1.2 billion to more than90,000 employees who voluntarily requested the payments, as well asadditional cash for those who received regular severance benefits(payment upon termination of employment regardless ofcircumstances), according to Public Works and Government Services,the department responsible for the payments. |
The numbers include payments to federal departments, agencies andmost Crown corporations, but don't factor in large, independentcorporations like Canada Post and Bank of Canada, which pay theiremployees separately. The government also is projecting it will spend at least another$850 million in the current 2012-13 fiscal year on accumulatedseverance payouts (including for resignation and retirement) owedto federal employees as per collective agreements signed bysuccessive governments over several years. The Conservative government, as of October 2010, halted theaccumulation of severance benefits for resignations andretirements, but is renegotiating a number of collective agreementswith public sector unions to cover what is already owed. "It's outrageous.
If taxpayers knew what is contained in federalunion contracts, we'd have a rebellion on our hands," said GregoryThomas, federal director of the Canadian Taxpayers Federation. "The contracts that the public is saddled with are too rich. It'san unbelievable deal that most federal government employees have." Along with the more than $2 billion needed to cover the severanceexpenses for 2011-12 and 2012-13, the government also has earmarked$900 million to cover "workforce adjustment" payments owed tothousands of employees who will be laid off due to federal budgetcuts. More than two dozen collective agreements signed by the federalgovernment and public sector unions allowed, up to October 2010,for the accumulation of severance to be paid to employees forresignations, retirements, layoffs and other reasons.
The Conservative government is settling the 27 collectiveagreements that allowed for the accumulation and voluntary payoutof severance, while eliminating the perk going forward. To date, the government and unions have settled nine of the 27collective agreements, covering more than 100,000 of the 212,000employees in the core public administration. Yet hundreds of thousands of core public servants who accumulatedthe benefits are allowed to voluntarily cash out the severancewhile they remain in their jobs. They also can wait until theyresign or retire to collect the cash, or receive some of it now andthe remainder when leaving the public service. Of the 91,613 workers who took the voluntary severance payout lastfiscal year, 92 per cent of those employees chose to receive thefull accumulated amount they're owed, rather than taking part of itnow and the rest when they leave the civil service, according toPublic Works and Government Services.
Treasury Board president Tony Clement was unavailable to comment onthe latest severance numbers, but he recently has been discussingthe need to change the culture in official Ottawa to one of "costcontainers" instead of "spending enablers." Clement's spokesman said the government has moved to eliminate theperk because it recognized that paying severance to peoplevoluntarily leaving their jobs was costly and a tough pill toswallow for taxpayers. "Our government is always looking to find savings for taxpayers andimprove value for their tax dollars and one important way to dothis is ending the costly practice of paying accumulated severancefor public servants quitting or retiring from the bureaucracy,"Sean Osmar, press secretary to the minister, said in an email. "We know this has been the common practice under old agreements,but it is expensive and is unfair to taxpayers and it is why wehave already completed agreements with several unions coveringabout 100,000 public servants ending it. We expect to finalizefuture agreements as collective bargaining processes continue." Severance pay for laid off federal employees is generally betweentwo and four weeks pay for the first year of service and one weekof pay for every other year of continuous employment in government,although it can be scaled back in the first year and subsequentyears if the employee voluntarily leaves. Federal public servantsalso receive what fiscal hawks call a "gold-plated" pension plan.
Employees in the private sector usually are paid a few weeksseverance for each year served, but the payment is generally onlyoffered to workers who are laid off. "It is a staggering amount of money paid out to people who are notlosing their jobs," said Dan Kelly, senior vice-president with theCanadian Federation of Independent Business, which represents morethan 109,000 small-business owners across the country. While Kelly doesn't blame civil servants for taking the money, hesaid the reaction from his members when they hear of the voluntaryseverance payouts is one of "jaw-dropping disbelief." "People don't actually believe this exists," he said. "I don'tthink the average taxpayer has a sweet clue just how much they arepaying for the perks for government workers." Twitter.com/jasonfekete Federal severance payments by the numbers: * In the 2011-12 fiscal year, 102,589 federal public servants wereissued either a voluntary severance or a regular severance payment,at a cost of more than $1.5 billion.
* 91,613 employees opted to receive the voluntary severanceliquidation payment at a cost of roughly $1.2 billion. * Approximately 92 per cent of employees receiving voluntarilyrequested severance took the full amount rather than accepting apartial payment now and the rest when leaving the public service. Source: Public Works and Government Services Canada.
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