President's Corner

PBO Report Confirms ACFO’s Findings

Fellow FIs,

The Office of the Parliamentary Budget Officer (PBO) has just released a report aimed to explain the $7.8 billion increase in public service wages from 2001 through 2012. The PBO report objectively concludes, based on the evidence, that the wage growth over the past decade is almost entirely attributable to additional hires and inflationary wage increases; and not a professionalization of the public service or collectively bargained increases in excess of inflation.

What should be taken from this report? The Canadians who make up the public service are not to blame for the economic woes of our nation. Furthermore, continued investment in our public service is an important step towards a solution.

We public servants have been taking much of the blame for the economic challenges that our nation is facing. The truth of the matter lies in the financial meltdown of 2008, not in our salaries and benefits.

The current recession was caused by a monumental lack of financial oversight and accountability which inevitably led to a financial collapse from which we still have not fully recovered. The unprecedented drop in corporate investment and corresponding government revenue cannot be fully corrected until confidence in our financial management framework is restored.

A recent study conducted by the Hay Group for ACFO confirms that a widening and substantial wage gap exists between the FI community and our financial professional counterparts in the private and not-for-profit sectors. Inflationary wage gains have not and will not address this trend. The financial management group is strained to recruit the talent that we need to meet the challenges facing the government today.

We know that our functions and roles have undergone a transformation during this period which has required more specialized financial skills and expertise. More particularly, we are now expected to provide financial performance information, sound risk management, rigorous stewardship and appropriate control standards.

Despite higher demands for accounting designations and finance specializations to meet transparency and accountability needs, terms and conditions of employment have not kept pace. As FIs, we lead and participate in efforts to ensure the availability of appropriate frameworks, policies, and financial stewardship to ensure our government’s fiscal house is in order. That is worth investing in.

Globally there is a growing movement for more open and accountable government. If we hope to continue to lead and attract international investment, we need to continue to work towards resourcing and recruiting the best and brightest to Canada’s financial management team. That will require continued hiring and compensation that reflects fair value for the work we perform.

The PBO report demonstrates that the government has increased in size. This is no truer than for our community. In the wake of the sponsorship scandal and 2008 financial crisis, the public has rightfully demanded greater financial accountability. Accordingly, significant and necessary growth in our ranks has occurred.

Our current government came to power on the promise of strengthening the nation’s accountability regime. Part of delivering on that worthy commitment was an investment in the FI Community. While our ranks have nearly doubled since 2005 in order to meet the increasing regulatory requirements, the true value of the work we do has not yet been rewarded.

The government has backed up its intentions by increasing the professional make-up of our community. In light of a new wave of public spending scandals, now is not the time to reduce the capacity that has been built up. Especially when trying to secure international investments and trading partners, it is imperative that Canada maintains its reputation as a world leader in financial management.

Many challenges remain. The public service community is not where we need to be in order to comply with the current government legislation. We are ahead of many of our European Union partners, but that is simply not good enough.

The facts remain that most workers have been scraping by to maintain our current standard of living. While the average Canadian has merely been able to keep pace with inflation over the past decade – albeit with eroding benefits – most unrepresented employees have not. This has created an alarming productivity gap between the value Canadians create and what we are paid. Make no mistake, our economy has made gains; they are just not going to the workers.

This report represents further evidence supporting our resolve as a group to continue working towards greater resourcing for the FI Community in order to further enhance government transparency and accountability. Our continued work to get Canada’s fiscal house in order requires nothing less.

 

Milt Isaacs, CMA, CPFA

President, Association of Canadian Financial Officers

 

11/10/2013

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