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OTTAWA Taxpayers could be on the hook for more than $1 billionin accumulated severance payments to federal public servants whoremain in their jobs, voluntarily quit their positions or retirefrom government. The eye-popping payout packages are in addition to an estimated$900 million in "workforce adjustment" payments including 22 weeks pay for one year of service that will begranted to thousands of federal employees losing their jobs due tofederal budget cuts. Combined, the two sets of payments could cost taxpayers $2 billion. More than two dozen collective agreements signed between thefederal government and public sector unions allowed, up to October2010, for the accumulation of severance to be paid out to employeesfor resignations, retirements, layoffs and other reasons. The government is now in the process of settling the 27 collectiveagreements that allowed for the accumulation and voluntary payoutof severance. The new deals being negotiated eliminate theaccumulation of severance pay for resignation and retirement. However, hundreds of thousands of core public servants whoaccumulated the benefits are allowed to voluntarily cash out theseverance while they remain in their jobs. They also can wait untilthey resign or retire to collect the cash, or receive some of itnow and the remainder when leaving the public service. To date, nine of the 27 agreements that allowed for theaccumulation and voluntary payout of severance have been settled,while also eliminating the lucrative perk going forward, accordingto the federal government. Those nine deals, which cover more than 100,000 of the 212,000employees in the core public administration, already are costingthe government $850 million in expected severance payouts. Additional cash will be needed in the future as Ottawa slowlysettles all of the collective agreements which means theseverance payout to remaining, resigning and retiring employeeslikely will top $1 billion. The cash settlements are on top of an additional $900 million incompensation, announced in the March budget, that the governmentexpects to pay out to public servants as Ottawa eliminates 19,200federal jobs over the next three years. The Privy Council Office, the hub of the public service thatsupports the Prime Minister's Office and cabinet, paid $10.5million in voluntary severance to 483 employees for the 2011-12fiscal year that ended in March, averaging out to around $21,739for every worker who requested the severance. The taxpayer-funded severance deals far outstrip anything generallyfound in the private sector, where compensation is often onlyoffered for layoffs and isn't paid out to employees who continueworking, quit or retire. Paying severance to employees who remain in their jobs orvoluntarily leave is "absolutely insane," said Dan Kelly,senior vice-president with the Canadian Federation of IndependentBusiness, which represents more than 109,000 small-business ownersacross the country. "The average Canadian who may have lost their job during therecession would be shocked to learn that civil servants, when theyquit or choose to retire to their gold-plated pension, we astaxpayers give them a nice big fat (severance) cheque," hesaid. Kelly argued most Canadians have no problem with governmentoffering a fair severance to people who lose their jobs through nofault of their own, but it's difficult to accept people get paidthe benefits when leaving under their own conditions. He credits the government for eliminating the accumulated severancebenefits for people who voluntarily leave their job, but said it'scosting "massive amounts of tax dollars" in the shortterm. It's also symptomatic of unions having their way with federalgovernments for decades, he said. "It demonstrates that over generations, politicians have beeneasy touches and have just rolled over to the demands of unions inagreement after agreement," Kelly added. Severance pay for federal employees is generally between two andfour weeks pay for the first year of service and one week of payfor every other year of continuous employment in government. For example, an employee with between 10 and 20 years service wouldreceive three weeks pay for the first year of work and one week forevery other year, for a maximum of 22 weeks of severance pay. Additional financial compensation, known as the transition supportmeasure (which is included in the $900 million figure announced inthe budget), is also offered to laid-off employees in many publicsector unions when a reasonable federal job can't be guaranteed. The transition support, which is paid on top of severance, offers22 weeks salary for a single year served in the public service, andincreases by two weeks pay for every additional year served (maxingout at 52 weeks transition pay). A laid-off federal employee with 10 years service would be paid 40weeks worth of transition support pay, while the compensationoffered to older laid-off employees who were nearing retirementtails off beginning at 30 years in the civil service. Public servants losing their jobs are also offered up to $11,000for tuition and other related fees, on top of the transitionsupport, if they choose to go back to school to upgrade theirskills. The nine collective agreements signed or settled with public sectorlabour groups include three represented by the Public ServiceAlliance of Canada, the largest federal public sector union, withapproximately 150,000 members. A couple of the settlements are with the Professional Institute ofthe Public Service of Canada which represents scientists,veterinarians, engineers and other professional staff while theremaining deals are with the Canadian Auto Workers and a couple ofother unions. Gary Corbett, president of PIPSC, said the accumulated severancebenefits were earned through give-and-take during successive roundsof collective bargaining with the government. While the general public may consider the severance an excessiveperk, he said his members have always been willing to give it up ifthey can get something worthwhile in return. "I can understand why the public sees it that way or that youcan have a negative way to look at it, but it's collectivelybargained, we're making some progress," Corbett said. "I don't think we're just giving it up. I think it would be alot worse if it was just taken away, and that has been threatenedby the government." Twitter.com/jasonfekete. 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