Decrease of federal employment presence a disturbing trend

Minister of Finance and President of Treasury Board Loyola Sullivan today commented on the impact that federal job losses are having on Newfoundland and Labrador. Federal government employment presence in the province decreased by 39 per cent between 1990 and 2004, compared to a decrease by 18 per cent across all provinces.

�If Newfoundland and Labrador had experienced the same rate of decrease of 18 per cent of federal employment presence, in 2004 there would have been an additional 2,774 people working in the federal public service in our province,� said Minister Sullivan. �When you also consider the various spinoffs from this employment, it would have easily translated into a total of 5,300 additional jobs for Newfoundland and Labrador.�

The minister said that this province is constantly being affected by decisions to move federal services such as the weather forecasting office from Gander to Halifax, and the decision to downsize the Public Service Commission from 16 current points of service into seven regional locations, thereby closing the St. John�s office. �The steady decline of federal employment presence, accompanied by a much lower expenditure on goods and services, should be seriously considered when the federal government is contemplating changes within the federal public service,� continued the minister.

The minister further indicated that there is an obvious difference in federal spending on goods and services in this province compared to other jurisdictions. On a per capita basis, the Maritimes receives the largest portion of federal spending on goods and services in the country.

�In 2002, the per person federal spending in the Maritimes amounted to $2,603,� said Minister Sullivan. �When you compare this to the $1,486 for Newfoundland and Labrador, the disparity is quite apparent. This is an important factor because this type of spending on goods and services is what fosters economic development and aids the expansion of our economy. This is not to be confused with federal transfers, as they do not grow the economy in the same way as direct spending.�

The minister also said that a significant portion of federal spending on goods and services in this province is for public service salaries and wages. A total of $422 million was spent on wages in this province in 2004, employing 8,316 people. While federal employment decreased in all provinces during the fiscal restraint period experienced during the 1990s, Newfoundland and Labrador experienced the greatest reduction.

�The recent happenings concerning reductions of federal government presence in this province regarding weather forecasting, the fishery, the Public Service Commission, and the like, are of great concern to us as a government,� continued the minister. �While there have been some increases in federal employment across the country in recent years, the trend is not occurring in this province. We are calling upon the federal government to ensure we have our fair share of federal jobs and federal expenditures on goods and services.�

Media contact: Melony O�Neill, Communications, (709) 729-0557, (709) 727-5517

2005 08 31                                     9:35 a.m.