On Thursday, March 29th, Finance Minister Jim Flaherty tabled the 2012 Federal Budget. The following is a summary of key points included in the Budget that are relevant to Financial Officers. As more details of the budget are made available to ACFO, they will be passed along.
Impact on the Workforce:
Elimination of 12,000 government positions over a 3-year period, with affected individuals qualifying for collectively bargained workforce adjustment measures
In total (including attrition), federal employment will be reduced by about 19,200 (or 4.8 %)
To the largest extent possible, the government will use these vacancies towards redeploying individuals whose jobs have been affected by the spending reduction
Elimination of about 600 executive positions, bringing the level of management overhead more in line with private sector best practices
This is about 7.4% of the executive workforce
A large proportion of full-time-equivalent reductions will occur in the National Capital Region
The government will make every effort to manage the employment reductions in a fair manner and aims to respect collectively bargained directives and benefits, which should minimize disruptions to Canadians
Where possible, the government will use natural attrition and internal redeployments to mitigate the impact on permanent federal employees
Public Sector Compensation:
Government will take action to bring federal public service compensation in line with that of other public and private sector employers
This includes eliminating the accumulation of severance benefits for voluntary resignation and retirement
Pensions of Public Servants and Parliamentarians:
Government plans to adjust the Public Service Pension Plan so that public service employee contributions equal, over time, those of the employer (50/50)
For employees who join the federal public service starting in 2013, the normal age of retirement will be raised from 60 to 65.