Few federal service cuts likely after $500M trim to travel, contract work

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Most federal government departments and agencies say they aren’t expecting to see any reductions in service following Treasury Board President Anita Anand’s demand that they cut spending on travel and contract work, though some, including Correctional Service Canada, expect varied changes.

The federal government’s 2023 budget outlined spending reductions on consulting, professional services and travel by $500 million (or 15 per cent) in 2023-24 as part of its goal to cut $15.4 billion in spending over the next five years. Of the $500 million outlined in the plan, $350 million related to professional and special services, with the remaining $150 million attributed to travel.

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A report by the Parliamentary Budget Officer published this month specifically analyzed the $500 million in spending reductions on consulting, professional services and travel for 2023-24. Professional services that the government procures include everything from lawyers to financial and business consultants to welfare and training services.

The report found that 64 of 68 impacted organizations within the federal government (or 94 per cent) would not see services impacted as a result of the spending reductions, while four would.

Correctional Service Canada said trimming spending on travel could affect moving inmates to in-person court appearances and staff training, according to a dataset published alongside the report.

Correctional Service spokesperson Esther Mailhot wrote in an email that the department would work to reduce travel costs through the use of videoconferencing, however, “travel will continue to be required for inmate transfers based on operational needs.”

The department also said cuts to spending on contracting out work would negatively affect construction, efforts to meet emissions reduction targets and maintenance on infrastructure like building wiring and tech improvements for its digital services and applications.

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Mailhot said CSC’s analyses were preliminary, with mitigation measures being planned to reduce impacts to services and operations.

With potential job losses being a major concern among public servants following the government’s announcement of cuts, Treasury Board noted in August that it didn’t expect to cut any public-service jobs aside from normal attrition or redeployment of workers.

The new Parliamentary Budget Officer report stated that one organization, Public Services and Procurement Canada, had identified a reduction of 49 full-time equivalent employees — also known as FTEs — though the positions were already vacant and were not being backfilled. The report said the reduction would not impact current FTEs.

The Canadian Northern Economic Development Agency indicated that the reductions would have minimal impact on its outreach activities.

In an email, spokesperson Craig Welsh wrote that the agency found cost savings by lessening in-person travel to events in favour of virtual attendance when possible. Welsh said it also minimized its budget for procuring outside professional services and would instead use the “expertise of staff internal to the organization.”

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Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) said it would use virtual meetings where possible. In an email, CIRNAC spokesperson Jennifer Cooper wrote that the department had identified travel savings of approximately 20 percent over previous years while noting that travel required by legislation or for health and safety reasons would not be impacted.

“We will continue to work with Indigenous partners to determine when in-person meetings are most important,” Cooper said, adding that the department recognized the importance of in-person meetings with partners.

The Treasury Board of Canada Secretariat unveiled its plan to decrease spending on professional services and travel in November, announcing that funding had been “refocused and removed” from the 2023–24 budgets of 68 organizations.

The Government of Canada website indicates that refocusing targets, under the categories of both professional services and travel as well as operations and transfer payments, had been identified for 80 organizations across the government.

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Soon after, the 2023 Fall Economic Statement announced further spending cuts of $345.6 million in 2025-26 and $691 million ongoing, though it provided few details on how that would be done. The Government of Canada website says specific details about “Phase 2” are being developed.

More details about the government’s refocusing spending initiative, including around organizations’ spending on operations and programming that could impact the public, are expected closer to the tabling of the upcoming budget.

According to the government, changes to spending will amount to $17.1 billion by 2027–2028 and to an additional $5.2 billion per year thereafter.

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