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March 8, 2009

This past week I visited our nation’s capital. Amidst the bad news on Nortel, a start-up community hanging on for its very life, and a softening aerospace/defense sector, were a series of upbeat headlines on the city’s true economic cluster, government. One headline announced, ‘Government buys 30 acres at St. Laurent and Hwy 417”; another trumpeted, “EDC land deal closes for $18mm” while the opening line of a third article read, “ Public Works re-launches procurement process for two build-to-lease Gatineau towers that will create 751,000 square feet of federal office space when completed by October 2012”. It should be noted that the latter announcement could only be found in the capital of that parallel universe that is our national French-English nuttiness. You see in Ottawa, exactly 25% of the federal government’s office space has to be on the Gatineau side of the river. As of last month, the office ratio between the two cities had alarmingly skewed in Ottawa’s favor (76.5% to 23.5%) setting off the search to secure the additional office space in Gatineau.

Sideshow balancing acts aside, why do you suppose the federal government needs all of that additional space? The official line has to do with replacing old deteriorating office space with more contemporary facilities. While this may well be the case, it is also likely that our ever-gorging government is once again adding a few more notches to its already ample belt, blithely oblivious to the belt-tightening all around it. This is born out by Statistics Canada numbers released last week that show overall employment numbers down in Ottawa except for the category called ‘public administration’ which grew by 1,900 jobs between January and February. On a year-over-year basis, the only sector to grow was the same public administration which saw employment rise by roughly 8,000 in the Capital region. The numbers suggest that despite less overall economic activity, and plummeting tax revenues, someone believes we need more not less public administration.

Upon returning to Toronto, I read a series of articles on the ‘bloated’ bureaucracy of the Toronto Transit Commission. Though the TTC will transport roughly the same number of people this year as it did 20 years ago, it now requires 25% more staff to transport them. Furthermore, spending is up 10.4% this year and the TTC is hiring 508 new staff.Among the people the TTC is hiring; seven people are required for ‘non-service training’ , twenty route supervisors, twenty-seven people for the ‘Work Safe/Home Safe safety culture program’, and eleven staff for the new ‘Geospacial Information System Initiative’. The transit authority is also hiring six additional staff because ‘tokens are heavier than the cancelled adult tickets’. Less you think Toronto’s City Hall is up in arms about such spending, it was also reported that they too are planning a ‘hiring binge’. Included in their recession-busting list of must-hire staff are a blackberry specialist, five grow-op inspectors, and my favorite, ‘an animal nutrition research assistant’ presumably to lend support to the chronically overworked animal nutrition researcher.

Governments are cursed with the organizational equivalent of a fat gene. They cannot help themselves. And even worse, though they may be repulsively obese to the public no one in public administration will ever admit to or willingly act upon a weight problem. In 2008, the TTC initiated a program to reduce absenteeism, a problem which cost the TTC more than $5-million in overtime than was budgeted. City council asked that a progress report be produced at year end. The TTC ignored the request and failed to produce such a report to budget committee as directed by council. They did however ask for more money for this program in 2009. Same with the report they failed to produce on their progress for reducing consultants…somehow it never happened. In fairness, can you blame the 400lb TTC ignoring weight loss advice from 500lb Toronto City Council?

Now the moment that TTC budgets get squeezed (which reports suggest will almost certainly be late this year or next) you can be assured that the transit authority and the Mayor’s office will argue that the TTC has the body mass index of a Kenyan marathon runner. No one will question the size of the token-carrying department, let alone why one is even needed. Nor will anyone raise questions about the $5mm long-weekend related absenteeism costs. They will instead immediately bemoan the need to start cutting bus routes as well as the diameter of brake linings on rush hour subway cars. No one ever said these self-preservationists were stupid.

The other notable actor in this farce is the unions. If you are a union leader these days the only place to be is the public sector, the last bastion of monopolistic service providers. Wielding the big stick of job action or service withdrawal, public sector unions ask for and get what they want, and what they understandably want is more jobs and the dues that go with them. Wanting more does not mean more efficiency, effectiveness or any nonsense related to return on public dollars spent. And despite the occasional beleaguered politician such as Larry O’Brien who will take them on, politicians over the past decade have known better than to say no. Government jobs added today must be negotiated away tomorrow and negotiations of this sort are always zero-sum games for unions.

We are in the midst of a global recession/depression with few safe places to hide. Governments are being asked to stimulate the economy and a multitude of initiatives are underway aimed at preventing a full economic free fall. Judging by recent articles on various levels of government this is likely to be one of the safest times ever for governments at all levels to gorge guilt-free. Rest assured it will be an extravagant feast and one that we will all pay for dearly.

Looking for a job with great hours, average pay, four day weekends, unbeatable benefits, union protection and heaven-on-earth pensions….head for the public sector. It is the only growth sector going.