The federal government said it would eliminate 19,200 jobs, about a third in the National Capital Region around Ottawa, as part of a spending review that will cut $5.2 billion over three years from government departments and agencies.

The job cuts, announced Thursday as part of the 2012 budget, represent about 4.8 per cent of the roughly 400,000 federal public sector workers.

The government said the cuts to the public sector are less severe than what public servants saw in the 1990s Program Review, when roughly 44,000 jobs were cut.

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Members of the Public Service Alliance of Canada demonstrate against planned public service cuts in Ottawa March 1. (Sean Kilpatrick/Canadian Press)

About 12,000 positions will be eliminated, with the remaining reductions coming from retirement and other voluntary departures. As well, workers whose jobs are eliminated will have an opportunity to come back if attrition creates more vacancies than anticipated.

Cuts considered modest

Included in the cuts are about 600 executive positions, or 7.4 per cent of the executive workforce.

Former Saskatchewan finance minister Janice McKinnon said the less severe cuts are reflective of a government still concerned about the impact deep cuts to services and employment might have on the economy.

Public policy analyst and accountant Bob Plamondon called the budget more of a "tweak than a transformation" and said the government didn't go far enough.

Public sector employment will remain above 2006 levels when the Conservatives came to power, Plamondon noted.

But Public Service Alliance of Canada national executive vice-president Patty Ducharme said the cuts represent a hit to services and said the government is being overly optimistic about attrition within the public service.

"A seven per cent cut is a huge cut for levels of service to Canadians from coast to coast to coast," said Ducharme. "They keep talking a lot about attrition ... and we're seeing people working longer because they are living longer, because things are more expensive, because they can't afford to retire."

"These are departments that have had significant cuts already, so people are doing more with less," said Ducharme. "So to say we can just keep cutting jobs and not impact jobs and services is delusional at best."

40% of cuts to happen in 2014-15

The cuts could bring upheaval to the public service in the Ottawa-Gatineau region, where roughly 130,000 public servants work.

The cuts come as part of a government review of its departments and agencies that will see departments reduce spending by $5.2 billion, or 6.9 per cent of a total of $75.3 billion up for review.

The planned reductions in spending will be between five and 12 per cent for most departments and agencies. The Ministry of Finance is cutting the deepest, with a planned cut of 16.8 per cent, while Veterans Affairs and Aboriginal Affairs and Northern Development have relatively modest cuts of 1.1 per cent and 2.7 per cent respectively.

In dollar terms, the biggest cuts are to the Department of National Defence, at $1.1 billion over three years, and Public Safety, to trim $688 million over three years.

The cuts to departments are weighted so that about 40 per cent of the cuts occur in 2014-15.

Public sector pensions to be reformed

The budget also proposes changes to the Public Service Pension Plan, making public servant contributions equal to the contributions of the employer. At present, employees contribute about 37 per cent towards their pensions.

Employees who join the public service starting in 2013 will also have their age of retirement moved from 60 to 65.

The budget also announced a number of other changes that will impact public servants, including:

  • The elimination of severance benefits for voluntary resignation and retirement. So far these have already been eliminated for about 230,000 federal employees.
  • The closure of the Advanced Leadership Program within the Canada School of Public Service.
  • The introduction of new office space standards at Crown-owned and federal government occupied buildings.