Headcount, btw, measures how many people are on the books – full-time, part-time, as casuals or students. FTEs measure actual work effort by standardizing hours into workload. Both matter — but together they can make tracking real staffing a moving target.
So, the PBO has developed a new model to project personnel spending.
This will be its baseline for any changes announced in the upcoming budget. It relies on regular pay data and yearly departmental plans compiled before Carney took office. It doesn’t include the government’s larger military spending or the potential impact of the spending review.
Unions already warn 15-per-cent cuts would be so deep that they would amount to Carney breaking his promise to cap, rather than shrink, public-service employment. The challenge: no one knows exactly what that “cap” means.
Now the PBO has stepped in with a baseline.
It has based it on government projections over the next five years, which include the Trudeau-era cuts. The number of FTEs is expected to fall over the next several years and poised to rise by year five to a level possibly higher than today.
The government’s challenge, says Giroux, is that it has two goals, and each one makes the other difficult to achieve. It faces a major expenditure review alongside with a personnel promise – to cap public service employment – and a fiscal promise to balance the operating budget, of which personnel are the largest slice.
PARTING SHOT
The PBO’s line in the sand
Giroux dropped the personnel report on the heels of his recent capital-forecasting report.
That report spells out its methodology for tracking capital spending. The government promised a budget overhaul splitting “operating” from “capital” spending. So far, the rules aren’t defined.
What counts as capital? What counts as operating? How will job cuts be measured?
With the Carney government aiming to double defence spending and hit NATO targets, capital expenses are set to soar — from $13.6 billion in 2023-24 to over $30 billion a year within five years. That’s more than double in under a decade. The government hasn’t been clear about how it defines capital versus operating spending. But the PBO says it’ll stick with international standards no matter how the government decides to define them.
“My bet is that they’ll probably try to have as broad a definition as possible,” said Giroux, “because it makes it that much easier to balance the operating budget. The more you push towards the capital side, the easier it is to balance the operating budget.”
The government follows international rules and standards, but Giroux says it may be tempted to stretch those definitions with weird or innovative accounting, as he puts it.
That’s why he’s laying down the PBO’s framework now. “We don’t know how they’ll define it,” he said. “But if they want to balance the operating budget quickly, there’s literally no other way than to shift big swaths to capital.”
Hmmm. This sounds like PBO is staking the ground before the government can.
By setting the yardstick now, it forces the government to play by international rules or explain why it wants different goalposts. The test will be whether the government’s next PBO pick — and parliamentarians — keep up the cause....
With these two reports, Giroux is drawing a line in the sand. His reports set out the definitions, baselines, and methodology the PBO will use to monitor the government’s promises, tracking how massive spending changes are made — and whether they actually work.
The timing isn’t accidental. By laying down these markers, Giroux ensures parliamentarians — and his successor — can hold the government to account once the budget realities kick in. The question is whether his successor will pick up the mantle.
How’s that for a dose of transparency and accountability as he heads out the door?
WHY IT MATTERS
It’s about measurement and accountability
It introduces a methodology to track personnel spending using more frequent pay data. It separates projections for civilian and non-civilian staffing (military/RCMP included). It distinguishes head counts (actual people) from FTEs (work equivalent). This is critical because past cuts reduced head counts while FTEs actually rose.
It’s a baseline for expenditure review. It sets clear starting points for measuring cuts, which didn’t exist before. It allows tracking of whether the public service is truly shrinking under the expenditure review. It provides capacity for twice-yearly updates so parliamentarians can monitor progress.
It’s an operating split vs. a capital budget split. The government plans to balance the operating budget while splitting expenditures into operating and capital budgets. It creates an incentive to shift operating expenses into capital (childcare transfers, immigration programs, infrastructure) to make balancing easier. Without clear definitions, departments may label operating expenses as “productivity investments” and put them under capital.
There are risks for public-service managers. Operating budgets face greater restraint since balancing that budget is Carney’s fiscal anchor. There is uncertainty over what counts as operating vs. capital. There’s a need to deliver the same services with fewer resources. Previous cuts show departments often hire more permanent staff to maintain service despite headcount reductions.
POST-GIROUX
Whoever takes over, it will be temporary
Giroux’s term ends Sept. 2, five days after departments’ Aug. 28 deadline for proposed 15-per-cent spending reductions that will shape the next federal budget in October. He leaves with another 20 or so reports in the pipeline for his successor.
I wrote in July about the unknowns surrounding Giroux’s fate and the huge impact he’s had on the office. At the time, the Privy Council Office said it was committed to appointing a “highly qualified individual” and noted the Parliament of Canada Act allows for an interim appointment in the event of a vacancy.
This week, it offered no timeline other than in to say “due course.” It didn’t say whether the position will be filled before the budget.
The only option now is a temporary appointment until the House and Senate return. A formal appointment requires approval from both chambers. Some suggest the government would prefer an interim watchdog rather than have its moves scrutinized by someone with Giroux’s experience and track record.
