III. Internal scan of the Federal public service

1. Public service workforce

Main issues

The ageing of the Public service raises challenges with regard to knowledge transfer and operational continuity, but it also creates an opportunity to bring in replacements that fit current and future Public service requirements.

Increases in the representation of most employment equity designated groups in the Canadian workforce will need to be reflected in their representation within the Public service.

Term employment is increasingly being used to begin a Public service career.

More emphasis is being put on bilingualism and providing services in both official languages.

Demand for alternative working arrangements is likely to rise in the coming years in response to demographic changes (older workforce, increased number of workers with eldercare responsibilities, etc.) and strategic needs (to delay retirement of key workers).

The human resources community faces multiple challenges: expansion of role and responsibilities; workload; and high vulnerability to the coming wave of retirements.

The size and composition of the Public Service workforce is constantly evolving in response to internal demographic changes and external influences. These include workforce ageing (just as the wider Canadian workforce ages), increasing representation of employment equity designated groups in the Public Service (reflecting the increasing diversity of the Canadian population), and changes to policies and regulations that shape both the composition of the workforce (e.g. the use of contingent employment) and its mobility (e.g. changing linguistic requirements). Decisions influencing workplace well-being, training and skills development also affect the ability of the Public Service to attract and retain employees.

As more public servants near retirement, rejuvenation of the Public Service is increasingly critical. The departure of older employees will provide an opportunity to hire new talented employees with a profile fitting tomorrow's professional, linguistic and representational needs. While term positions have decreased significantly, approaching lows not seen since the 1990's, the extensive use of non-indeterminate employment to recruit indeterminate employees may complicate hiring of talented employees.

Federal public service workshop by employment type

The Public Service increased in size by 21% over the last five years, in part as more indeterminate positions were created to implement the term conversion policy in 2003. In fact, indeterminate hiring has far exceeded departures over the last several years, providing a buffer against future departures. Overall PS turnover rate is expected to reach approximately 5% in each of the next 4 years (3-4% for retirements and 1% for all other reasons).

Source: Public service human resources management agency of Canada, research directorate

Current recruitment methods remain transaction-based, leading to delays and inefficiencies. In addition, the current number of applicants, many very highly qualified, exceeds PS demand. Retaining new employees will also be a major issue, emphasizing factors that facilitate new recruitment, such as alternative working arrangements and career development planning.

Beyond the issue of replacing departing employees, Public Service renewal also requires knowledge transfer from more experienced employees to younger co-workers. In order to extend the period over which this can take place, it may be prudent to provide potential retirees with alternatives to full retirement, such as workload or hours reduction, teleworking, etc. In fact, innovative approaches that do not affect employee pensions may be needed. Management of the coming retirements will require HR professionals to analyze their workforce to estimate, as precisely as possible, the nature and magnitude of the challenges their organizations will face.

Changes affecting the roles and responsibilities of human resources professionals, and the issue of their heavy workload, may make it more difficult to retain members of the human resources community at a time when ageing of the workforce is further increasing their workload and a larger proportion of them are becoming eligible to retire. In addition, recruitment and training of human resources community members may have to be adjusted to reflect the need for new skill sets. Because managers of the human resources community seem to be more receptive to alternative working arrangements, these could be used to prolong the employment of experienced human resources professionals who are eligible to retire.

In the short term, the implementation of the new employment equity workforce availability estimates will add to the workload of employment equity practitioners. Workforce analysis will be need revision; potential changes to employment systems and employment equity plans are also possible. In the longer term, the need to significantly increase the representation of visible minorities may require the implementation of special initiatives. Moreover, increases in the workforce availability of most designated groups may be taken as sign that, inside and outside the Public Service, representation is regressing rather than improving. Retention of persons with disabilities may also become an issue as more of them reach retirement eligibility and because of the tendency of disabilities to become progressively more incapacitating.

The reinforcement of the delivery of bilingual services inside and outside the Public Service will affect the management of official languages in the Public Service. As language training becomes pro-active instead of reactive, demand for such training may increase, putting increased pressure on training infrastructures. Additional financial and human resources could be required to administer and pay for language training. Moreover, misunderstanding of official languages policies may provoke negative reactions in the public and in Public Service, particularly where employment mobility is adversely affected.

An ageing public service drawing closer to retirement

Ageing of the Public Service indeterminate workforce translates into a rise in the proportion of employees eligible to retire without penalty. Eligible employees accounted for 6.4% of the March 2004 workforce compared to 4.4% three years earlier. The size of this group is expected to become even larger within 3 to 5 years from the reference date.

Although these levels of retirement eligibility do not precisely indicate the volume of retirements to be expected in specific years, because most employees do not leave immediately upon becoming eligible to retire, they do suggest a near-term acceleration of departures from the Public Service. As persons with disabilities are older on average than the rest of the Public Service, they may be affected by this trend sooner than their colleagues. Other designated groups, and Aboriginal peoples in particular, are younger on average than the rest of the Public service and should be less affected in the short term.

Fortunately, hiring of young employees in recent years has helped rejuvenate the Public Service. In fact, the average age of the indeterminate workforce remained almost unchanged between 2001 and 2004 at about 45 years, and the average years of pensionable service has even decreased from 16.1 years in 2001 to 15.3 years in 2004.

Indeterminate departure rates

Source: Information extracted from incumbent files as of the last pay period of March 2001 and 2004

Indicators of ageing of the public service workforce
Indicator	March 2004	March 2001
Proportion of the workforce eligible to retire immediately	6.4%	4.4%
Proportion of the workforce eligible to retire within 3 years	16.1%	13.1%
Proportion of the workforce eligible to retire within 5 years	33.5%	29.8%
Average age	45.1	45.0
Average years of pensionable service	15.3	16.1

Implications

• As more public servants near retirement, rejuvenation of the Public Service becomes ever more critical. The departure of older employees provides an opportunity to hire new talented employees that fit tomorrow's skill, linguistic and representational requirements.
• Public Service renewal also requires the transfer of knowledge from older and more experienced employees to their younger replacements. Offering employees eligible to retire alternatives to full retirement such as alternative working arrangements, could buy time to complete knowledge transfers. Innovative approaches to retirement that do not affect employees' pensions may need to be developed to help meet this challenge.
• The handling of the coming wave of retirements will require human resources professionals to analyse their workforce to estimate, as closely as possible, the nature and magnitude of challenge in their specific organization.

Current and future needs

Issue: An ageing public service drawing closer to retirement

Trends

• The proportion of employees eligible to retire without financial penalty rose from 4.4% in March 2001 to 6.4% in March 2004. Eligibility levels are expected to become higher.
• The rise in the proportion of employees eligible to retire suggests an acceleration of departures from the Public Service.
• As persons with disabilities are older, on average, than the rest of the Public Service, they may be affected sooner than their colleagues.
• The recent hiring of younger employees kept the average age of the indeterminate workforce almost unchanged between 2001 and 2004 at about 45 years, and to decreased the average years of pensionable service from 16.1 years in 2001 to 15.3 years in 2004.

Current needs

• Analyze the extent and nature of the coming retirement wave at departmental level.
• Develop strategies to facilitate recruitment of new employees and foster their retention.
• Replace departing employees, taking into account knowledge transfer and training.
• Retain experienced employees by providing appealing alternatives to full retirement.
• Ensure that knowledge is transferred to younger employees.
• Integrate employment equity and official languages considerations into workforce renewal planning.

Future needs

• Monitor actual and planned departures, and adjust human resources plans and activities accordingly.

Related issues in other sections

Population: Population ageing Population: An increasingly diverse society Population: A younger population of aboriginal peoples Population: Persons with disabilities Economy and labour market: A changing labour market Economy and labour market: Convergence of skills and competencies toward a knowledge-based economy Society and culture: Social values and ethics

Increasing employment equity expectations

The workforce availability estimates used to determine where members of employment equity designated groups are under-represented in the Public Service workforce have been updated to reflect 2001 census data. The new estimates show higher levels of availability for Aboriginal peoples, visible minorities and women, thus raising expectations with regard to the proportion of designated group members to be employed in the Public Service.

This is particularly problematic for visible minorities who were under-represented even before availability estimates increased. As of March 2003, visible minorities accounted for 7.4% of the Public Service workforce while their workforce availability was estimated at 8.7%. Under the updated estimates, their availability now stands at 10.4%. Obviously, additional efforts will be required to raise their workforce representation to their estimated availability. To make matters worse, visible minorities tend to be over-represented among the dwindling term workforce.

Although the availability estimates of women and Aboriginal peoples have increased substantially as a result of the revision, their overall representation within the Public Service is higher than their revised availability estimate. Nevertheless, at a more detailed level of analysis, by department or occupational group for example, the new availability figures may identify under-representation problems where none were apparent before.

The most recent workforce availability estimate for persons with disabilities is clearly lower than that observed previously, in part due to changes in data collection. As disability tends to increase with age, population ageing should translate into higher disability levels in the Canadian population. The nature and extent of the disabilities affects the representativeness of the Public Service with regard to persons with disabilities, by influencing both their workforce availability and their representation within the Public Service.

New workforce availability estimates for employment equity designated groups
Designated group	Previous workforce availability estimates	New workforce availability estimates	Workforce representation in March 2003
Visible minorities	8.7%	10.4%	7.4%
Aboriginal peoples	1.7%	2.5%	3.9%
Women	48.7%	52.2%	52.8%
Persons with disabilities	4.8%	3.6%	5.6%

Sources: Previous workforce availability estimates and workforce representation as of March 2003 were drawn from Treasury Board Secretariat's Annual Report on employment equity for fiscal year 2002-03, while the new workforce estimates were drawn from the 2003-04 Report.

The new availability figures have been distributed to departments and agencies to enable them to update their workforce analysis. Once the impact of the new figures has been determined, departments will need to update their employment equity plans to address representation gaps.

Implications

• In the short term, the main implications for human resources management are:
  • An increased workload for employment equity practitioners as the implementation of the new employment equity workforce availability estimates will require a revision of the workforce analysis and potentially of the employment systems review and employment equity plan
  • The increase in the workforce availability estimates of most designated groups may trigger the perception that the Public Service is becoming less representative of the Canadian population.
• In the mid-term and long-term:
  • The deterioration of an already problematic situation with regard to visible minorities may require the implementation of remedial initiatives.
  • Retention of persons with disabilities may become an issue in the coming years as more and more of them reach retirement eligibility.

Current and future needs

Issue: Increasing employment equity expectations

Trends

• Estimates of workforce availability have increased for most designated group members: from 8.7% to 10.4% for visible minorities; from 1.7% to 2.5% for Aboriginal peoples; and from 48.7% to 52.2% for women.
• The estimate for persons with disabilities has decreased from 4.8% to 3.6%.

Current needs

• Departmental employment equity specialists need to revise their workforce analysis using the new availability figures.
• Where warranted by the results of the revision of the workforce analysis, it may be necessary to update the employment systems review and the employment equity plan.

Future needs

• Public Service-wide initiatives may need to be implemented to improve the representation of visible minorities.
• Department-specific employment equity programs may need to address under representation where gaps have been identified.

Related issues in other sections

Population: The situation of women Population: An increasingly diverse society Population: A younger population of aboriginal peoples Population: Persons with disabilities Economy and labour market: A changing labour market Economy and labour market: Convergence of skills and competencies toward a knowledge-based economy Society and culture: Social inequity and access to education Science and technology: Digital divide Business and human resources management goals of the Government: Supporting Government’s commitment

Increased use of term employment as a point of entry into a Public service career

The use of term employment provides departments and agencies with the flexibility to respond to temporary needs and deal with budget variations. But while the use of term employment is legitimate in itself, concerns have been raised with regard to the extent to which indeterminate employees are first hired as terms rather than as indeterminate employees. Not only does this adversely affect access to skilled candidates, but it also reduces access to candidates who belong to an employment equity designated group. Moreover, until they become "permanent", term employees may be attracted to offers of more stable employment elsewhere, and leave the Public Service.

The number of employees moving from term to indeterminate status has increased over the past three years, reaching nearly 9,800 in 2003-04. While part of the increase in 2003-04 may result from the implementation of the new policy on term employment, the fact remains that the number of "term to indeterminate" appointments has increased by about 1,200 every year since 2000-01.

In 2003-04, only 31% of all new indeterminate employees were recruited from the general public; the remaining 69% were appointed from the term workforce. This departs from the pattern of the previous three years when external recruitment accounted for about 40% of all new indeterminate employees.

Source of new indeterminate employees between 1999-00 and 2003-04

Sources: Public service commission's databases at http://extranet.psc-cfp.gc.ca/centres/index_e.htm

Implications

The recruitment of indeterminate employees from among term employees may jeopardize the capacity of the Public Service to attract and retain talented employees.

Current and future needs

Issue: Increased use of term employment to enter a Public service career

Trends

• The number of employees moving from term to indeterminate status has increased steadily over the past three years.
• The use of term in place of indeterminate employment adversely affects access to skilled candidates, reduces access to candidates who belong to an employment equity designated group, and increases the risk of losing good prospects to other employers.
• In 2003-04, 69% of all new indeterminate employees were appointed from the term workforce, compared to about 60% in the two previous years.

Future needs

• Development of mid-term and long-term human resources plans that clarify recruitment, retention and financing needs, and make more focussed use of term employment.

Related issues in other sections

Economy and labour market: A changing labour market Economy and labour market: Convergence of skills and competencies toward a knowledge-based economy

Renewal of official languages program

In March 2003, the Government launched a five-year plan to renew Official Languages in the public service. The renewal effort includes a review of Official Languages policies, better monitoring of results achieved, and funding to encourage innovative projects in federal institutions. The intent was to improve service to the public in both English and French, encourage the use of both languages in federal workplaces, and ensure the equitable representation of both linguistic groups in the federal workforce.

English/French participation within the federal workforce now tends to be more or less reflective of the Canadian population. Anglophones represent about 68% of the Public Service workforce and 76% of the overall Canadian population; conversely, Francophones represent about 32% of the Public Service workforce and 24% of the overall Canadian population. The higher proportion of Francophones in the Public Service is largely influenced by the concentration of Public Service positions in the National Capital Region, about two-thirds of which are bilingual, and by the significantly higher rate of bilingualism observed among employees whose first official language is French.

In 2004, more than half of Public Service positions required knowledge of English only, while only 5% required knowledge of French only. Between 2001 and 2004, the proportion of employees in bilingual positions grew from 34.2% to 36.6%, partly as the result of the increased concentration of the Public Service workforce in the National Capital Region. Concurrently, the share of bilingual positions in overall recruitment jumped from 20.6% in fiscal year 2000-01 to 27.4% in 2003-04.

Under the Official Languages policies issued by Treasury Board in April 2004, imperative staffing must be used by April 2007 to fill positions at the EX 02 level and above. Non-imperative staffing is possible for other levels and positions open to the public, but requires written justification.

The new policies also emphasize pro-active language training as part of employee career planning. Second official language learning and retention are to be integrated with other aspects of an employee's career development plan in order to ensure that employees achieve the level of fluency required to permit uninterrupted career progression.

A study conducted in 2002 showed that public servants supported providing services to the public in both official languages, but that most public servants did not understand the geographical application of service and the language-of-work requirements, and believed that the official languages program is applied the same way everywhere in Canada. Studies by the Agency and by the Commissioner of Official Languages indicate that French is used less in the workplace than could be expected, and Francophone employees perceive that they are not able to function fully in their language.

Implications

• As language training becomes pro-active instead of reactive, demand for such training is likely to grow, thus increasing the need for funding and supporting infrastructure.
• In the short term, access to language training will have to be provided to employees called upon to fill upper-level bilingual positions, which are staffed on an imperative basis. Moreover, simultaneous commitments to employment equity and official languages will require continuous monitoring and consultation with the communities affected.
• Misunderstanding of official languages policies may cause negative reactions from the public and Public Service employees, particularly where mobility is adversely affected.

Current and future needs

Issue: Renewal of official languages program

Trends

• In March 2003, the Government launched a five-year plan to renew Official Languages in the Public Service, including a review of policies, better monitoring of results, and funding for innovative projects.
• Anglophones represent about 68% of the Public Service workforce and 76% of the overall Canadian population; Francophones represent about 32% of the Public Service workforce and 24% of the overall Canadian population.
• In 2004, more than half of Public Service positions required knowledge of English only, while only 5% required a knowledge of French only.
• The proportion of employees occupying a bilingual position grew slightly from 34.2% to 36.6% between 2001 and 2004.
• The share of bilingual positions in overall recruitment jumped from 20.6% in fiscal year 2000-01 to 27.4% in 2003-04.
• Under the Official Languages policies introduced in April 2004, imperative staffing is the norm when filling bilingual positions. By April 2007, imperative staffing will be mandatory for EX-02 level and above and the use of non-imperative staffing at other levels must be justified in writing.
• Among employees who have been tested for their knowledge of the second official language, about 30% of those who declared English as their first official language were bilingual at the CBC level or above, compared to nearly 90% of those who declared French their first official language.
• Bilingual positions are usually staffed with candidates who are already bilingual.
• Employment equity designated groups, other than women, tend to show a higher than average proportion of employees who declared English their first official language.

Current needs

• Language training needs to be integrated into career planning.
• The impact of linguistic requirements on the mobility of the existing workforce needs to be monitored.

Future needs

• Proper financial, human, and technical resources need to be allocated to respond to an expected increase in the demand for language training.
• Recruitment may require adjustment to optimize the recruitment of candidates who are already bilingual, including designated group members.
• Specific programs may be required to develop second-language skills among targeted subsets of the Public Service, such as designated group members.

Related issues in other sections

Population: An increasingly diverse society Population: A younger population of aboriginal peoples Population: Linguistic composition

More demand for alternative working arrangements

Studies inside and outside of the Public Service have identified work-life balance as one of the most important factors in determining employee satisfaction, which in turn affects employee productivity and retentions. Alternative working arrangements facilitate the achievement of work-life balance by allowing employees to modify their working schedule, go on some form of leave, telework, benefit from on-site day-care facilities, pursue continuous education, etc.

A number of factors could lead to an increase in the demand for alternative working arrangements in the coming years. First, younger workers seem to value work-life balance more than those of preceding generations. Second, the proportion of employees who are faced with eldercare responsibilities, sometimes coupled with childcare, is expected to increase. Third, the ageing of the workforce may bring some employees to seek alternative working arrangements for personal or health-related reasons. Some working arrangements could provide an alternative to full retirement thus delaying departure and providing more opportunity to transfer knowledge from more experienced workers to their younger replacements. Finally, changes in the nature of work, including transition to a knowledge-based economy, mean that proportionally more jobs will lend themselves to alternative working arrangements such as teleworking.

Among the many alternative working arrangements available in the Public Service, some come at a cost for employees. Some of the costs are obvious (e.g. salary reduction resulting from working part-time rather than full-time), others subtle (e.g. adjustment of leaves on a pro-rata basis for part-time workers); some are even less obvious (e.g. adjustment of superannuation and death benefits for part-time workers). In addition, alternative work arrangements may affect employee career progression by removing them, partially or completely, from the workplace. As women and Aboriginal peoples tend to be over-represented in alternative working arrangements, they may be at a disadvantage compared to the rest of their colleagues with regard to the pace and reach of their career progression.

Implications

• Alternative working arrangements set up to provide an attractive alternative to full retirement may facilitate retention of experienced employees, thus providing more time to transfer their knowledge and allowing departments to benefit longer from their experience and productivity.
• Such arrangement may also facilitate the hiring and retention of younger employees by helping to establish work-life balance.
• The impact of alternative working arrangements on employee career development plans should be considered.

Current and future needs

Issue: More Demand for Alternative Working Arrangements

Trends

• Work-life balance has been identified as driving determinant of employee satisfaction.
• Younger workers seem to value work-life balance more than those of older generations.
• A higher proportion of employees will face eldercare responsibilities, often in addition to caring for their children.
• As the workforce ages, more employees may seek alternative working arrangements for personal or health-related reasons.
• Transition to a knowledge-based economy is facilitating the use of alternative working arrangements.
• Some alternative working arrangements may adversely affect the career progression of employees using them, especially more prevalent users like women and Aboriginal peoples.

Current Needs

• Integrate alternative working arrangements into the development of human resources strategies and customize them to achieve human resources goals such as fostering the recruitment and retention of new employees, improving the retention of older employees, and facilitating the transfer of knowledge from employees who are about to retire.

Future Needs

• An increase in demand for alternative working arrangements may require additional investments in the development of new policies or the updating of existing ones.
• Assess and monitor the impact of alternative working arrangements on career progression, particularly for employment equity designated group members.

Related issues in other sections

Population: Population Ageing Population: The Situation of Women Population: Persons with Disability Economy and Labour Market: A Changing Labour Market Society and Culture: Working Conditions Science and Technology: Computerization of Work and On-line Learning and Development Tools

A Human Resources Community Faced with Multiple Challenges

Human resources professionals are at the heart of human resources management activities, but their work has changed in recent years. In addition to their traditional role of supporting and delivering human resources operations, human resources professionals are now actively involved in strategic planning activities at organizational level, and in "change management" activities, while fostering engagement among employees and promoting ethics and values. Moreover, they are expected to take full advantage of technological innovations. Consistent with the increasingly strategic role played by the human resources community, the analysis and measurement of human resources is gaining more importance (e.g. demographic analysis for retirement planning purposes, measuring the health of the organization with regard to human resources issues, etc).

The pace of change does nothing to address the workload issue identified by the human resources community in both the 1999 and the 2002 Public Service employee surveys. In 2002, about half of the community members who responded to the survey said: (1) they had difficulty completing their assigned workload during regular hours; (2) the quality of their work suffered from inadequate resources; and (3) the level of turnover among employees of their unit was problematic. Although employees of other communities also reported being affected by these issues, their impact seemed to be felt more strongly in the human resources community.

In addition, the human resources community in general, and PE employees in particular, may be more vulnerable to the coming wave of retirements resulting from the ageing of the Public Service workforce. On average they are closer to reaching retirement eligibility than the rest of the Public Service, and their salary and working conditions may put them at risk of taking earlier retirement, although higher education levels and factors associated with recognition and career satisfaction might help retention. On a more positive note, members of the human resources community indicated in the 2002 Public Service employees survey that both their supervisors and senior management showed strong support for alternative working arrangements, more so than indicated in the rest of the Public Service. The 2002 survey also indicates that members of the human resources community are more likely to report having access to departmental support for their career development, as well as access to skill-development opportunities. These factors may contribute to the retention of human resources community members in the years to come.

Implications

• Changes affecting the roles and responsibilities of human resources professionals, as well as the excessive workload issue, may make it more difficult to retain members of the HR community at a time when ageing of the workforce will further increase their workload, and make a larger proportion of them eligible to retire.
• In addition, recruitment and training of human resources community members may have to be adjusted to reflect the need for skills that go beyond traditional human resources practitioner skills.
• Alternative work arrangements may facilitate the retention of experienced human resources professionals if they provide an attractive alternative to full retirement. Furthermore, the human resources community has indicated openness to such flexibility.

Current and Future Needs

Issue: A Human Resources Community Faced with Multiple Challenges

Trends

• The nature of the work performed by human resources professionals has changed in recent years, and more complex functions have been added to their traditional role of supporting and delivering human resources operations.
• The workload and turnover of human resources professionals are problematic.
• The retirement of more experienced employees may affect the human resources community sooner than the rest of the Public Service.
• Human resources professionals seem to have better access than the rest of their colleagues to alternative working arrangements, skill-development opportunities, and departmental support for their career development.

Current Needs

• Recruitment and training of human resources professionals needs to reflect the evolution of the work they do, shifting away from operations to analysis, planning, and a broader use of technology.

Future Needs

• The development of alternative working arrangements could provide a way to retain human resources professionals longer.
• Monitor departure and turnover rates of the human resources community.

Related issues in other sections

Population: Population Ageing Science and Technology: Internet Based Service Delivery and Computerization of Services Politics and Governance: Commitment of the Government to Public-Private Partnerships (P3) Business and Human Resources Management Goals of the Government: Improving the Mechanics of the Public Service Business and Human Resources Management Goals of the Government: Modernizing an Outdated Human Resources Management Framework Business and Human Resources Management Goals of the Government: Accountability, Trust and Financial Management

2. Business and Human Resources Management Goals of the Government

Main Issues

The Government has committed to positioning Canada on the international scene, in both economic and diplomatic terms.

Improvements to the mechanics of government rank high on the Government's agenda.

The Public Service Modernization Act is intended to facilitate staffing and learning, enhance planning, and make the Public Service a better place to work.

Fiscal responsibility and accountability are at the forefront of government priorities.

The goals established by the Government provide high-level direction for parliamentarians and the Public Service. Ultimately, they set the framework within which departments and agencies will refresh their business and human resources plan, adjusting their priorities to reflect those of the Government. The Speech from the Throne, which opens every new session of Parliament, affirms the values of the Government, articulates the over-arching goals and directions it will pursue, and sets forth the initiatives the Government will take to achieve these goals. The Annual Report of the Clerk of the Privy Council Office, submitted to the Prime Minister by the Head of the Public Service each fiscal year in accordance with the requirements of the Public Service Employment Act, provides an overall picture of the current state of the Public Service, its commitments, and priorities. The budget, prepared by the Department of Finance, sets forth the economic plans for pursuing the Government's agenda.

The Government is focussing on ensuring that the Canadian labour market and its workforce are ready to face international competition, especially in the knowledge-based economic sectors requiring highly skilled employees, and research and development investments. In addition to positioning Canada advantageously on the international economic scene, the Government has reiterated its commitment to maintaining its influence in the international community, and fostering multilateral peaceful solutions and fair and equitable economic development.

The notions of fiscal responsibility and accountability are present in virtually all expressions of the Government's goals and priorities. The Speech from the Throne reiterates the will of the Government to avoid deficits, reduce debt and realign Public Service expenditures to better reflect current priorities. The 2004 budget was crafted accordingly, prioritising issues of health, Aboriginal peoples, learning and security. Additional policies and initiatives have contributed to improved financial management (for example, the implementation of an improved information system and the introduction of new governance rules for Crown corporations).

The federal Public Service places a high value on serving Canadians with excellence and in the official language of their choice, with employees effectively and ethically led in a high-quality work environment respectful of their linguistic rights and cultural diversity. Not only is the Public Service the single largest employer in Canada; by the very nature of its mandate and responsibilities its role is highly important to the well-being of Canadians. To properly serve the public interest and support democratic governance, it is essential the Public Service has the right people in the right place at the right time. The legal framework that surrounds human resources activities in the Public Service has a clear impact on its capacity to match required skills with competencies in a timely fashion. Improving the mechanics of government, and of the Public Service in particular, has received much consideration, and has been the object of much effort. Whether within the context of the Public Service Modernization Act or going beyond it, many initiatives have been put forward. These include issuing the Management Accountability Framework; establishing expenditure review as a permanent exercise; providing protection for disclosure of wrongdoing in the workplace; developing a new values and ethics code; etc.

Positioning Canada in the 21^st Century Global Economy

The Government has acknowledged the crucial importance of facilitating the transition to a knowledge-based economy and society. This has been demonstrated in recent Speeches from the Throne, and in the announcement, in the 2004 budget, of increased funding of education and R&D in order to take advantage of technological developments and integrate them into the Canadian economy.

The development and maintenance of a workforce with the necessary skills requires not only a commitment to education, but also an appreciation of the vital role of immigration. Weakness in the assessment of foreign credentials and work experience may prevent immigrants from contributing to the fullest extent in the labour market.

As a major employer and service provider, the federal public service needs to keep pace with the transition to a knowledge-based society, ensuring its workers possess the skills and expertise to excel in an increasingly complex and challenging environment.

In addition to positioning Canada advantageously on the international economic scene, the Government has reiterated its commitment to maintaining and strengthening its influence in world affairs. Canada wishes to use its influence and credibility to promote a more peaceful, secure, and cooperative world community through international institutions and multilateral initiatives along with fairness and equality of opportunity. Canada's bilateral relationship with the United States is also of central importance, and currently focuses on border security.

The Government has recognized that many of the issues facing the world today, like terrorism and the environment, need to be addressed at the international level and require an unprecedented level of cooperation among nations. Furthermore, Canada has expressed its intention to play a key role in such international initiatives.

Implications

Maintaining Canada's contribution to international institutions and multilateral efforts, especially in the areas of environmental protection, international development, and international security.

Current and Future Needs

Issue: Positioning Canada in the 21^st Century Global Economy

Trends

• The knowledge-based economy and society is expanding.
• Immigration plays an important role in the development of a skilled workforce.
• An increasingly global approach with international cooperation in addressing common issues.

Current Needs

• Greater commitment to security initiatives.

Future Needs

• Supporting the development and maintenance of a highly skilled Public Service workforce.
• Strengthening capacity to initiate and participate in international initiatives, especially in the areas of environmental protection and sustainable development.

Related issues in other sections

Population: An Increasingly Diverse Society Economy and Labour Market: Fiscal Policies of the Government Economy and Labour Market: Innovation and Productivity Economy and Labour Market: A Changing Labour Market Economy and Labour Market: Convergence of Skills and Competencies Toward a Knowledge-Based Economy Society and Culture: Social Inequity and Access to Education Science and Technology: Digital Divide Science and Technology: Commitment to Research and Development Environment: Impact of Long-term Environmental Issues on Government’s Business and Workforce Requirements Environment: Commitment of the Government Toward Preserving the Environment and Supporting Sustainable Development

Improving the Mechanics of the Public Service

Multiple efforts have been made in recent years to improve the management of the Public Service. Examples include enhancement of the ethics code for all federal public office holders, the creation of the Public Service Human Resources Management Agency, the implementation of new policies on continuous learning and term conversions, and on-going expenditure review.

In June of 2003, Treasury Board Secretariat issued the Management Accountability Framework, which established expectations for sound management practices in the Public Service. It provides managers with a comprehensive and integrated model for assessing progress and measuring results through the use of clear indicators, while at the same time strengthening accountability at all levels of management. The Management Accountability Framework integrates the principal elements of Modern Comptrollership, Human Resources Modernization, Service Improvement and Government On-line. It provides a way to understand and connect various Treasury Board Secretariat management improvement initiatives and provides a basis for engagement with departments and suggests ways to both move forward and measure progress. The Management Accountability Framework recognizes that the role of Public Service employees is to translate the direction provided by government into results for citizens.

The framework integrates management reporting procedures related to Treasury Board Secretariat management improvement initiatives. The framework will be used in several ways. It will form a basis for dialogue between Treasury Board Secretariat and deputy heads on the state of management practices in their organizations, and on priorities for improving the situation. It will help Treasury Board Secretariat provide the Privy Council Office information relative to the assessment of deputy head performance in managing their departments and agencies. It will also support management assessment within the five-year cycle of expenditure and management reviews being undertaken by the Treasury Board Secretariat. Implementation is proceeding from the top down, with Deputy Heads leading by example.

Recent high-profile cases of unethical and even illegal activity in both the private and public sectors have underlined the importance of disclosing wrongdoing in the workplace. This disclosure can be made to the employer, customers, law enforcement authorities, regulators or the media. The risk of reprisals or other negative consequences for disclosing wrongdoing can lead to a workplace culture of secrecy. Such a culture would deny organizations a vital opportunity to deal with serious problems pro-actively.

The issue of disclosure of wrongdoing in the workplace figured prominently during recent debates around bill C-11. The Public Service Human Resources Management Agency has moved to facilitate the creation of an environment in which disclosures can safely be made through explicit policy directives such as the Policy on the Internal Disclosure of Information Concerning Wrongdoing in the Workplace and the Values and Ethics Code for the Public Service. However, a number of stakeholders feel that these initiatives provide insufficient protection for individuals making such disclosures.

Implications

• To ensure that all levels of management become familiar with the common framework for results-based management, human resources professionals will provide managers with related information and strategic advice.
• Departments will need to report outcomes to central agencies to allow them to gain a government-wide perspective on the situation.
• Human resources professionals will be tasked with the implementation of human resources metrics under the management accountability framework
• Disclosure of wrongdoing in the workplace provides a means of protecting politicians, public servants and the Canadian public from the economic and political costs of illegal activities in the Public service.

Current and Future Needs

Issue: Improving the Mechanics of the Public Service

Trends

• The implementation of an integrated results-based approach to management across the Public Service.

Current Needs

• Raising employee awareness of government policy related to values and ethics.

Future Needs

• Managers at all levels need to be educated about the Management Accountability Framework and have the necessary human resources support to meet their performance goals.
• Continue to foster an open and honest workplace culture where unethical activity is neither tolerated nor ignored.

Related issues in other sections

Economy and Labour Market: Labour Relations Public Service Workforce: A Human Resources Community Faced with Multiple Challenges

Modernizing an Outdated Human Resources Framework

The Public Service Modernization Act (PSMA) establishes a new legal and conceptual framework for managing human resources, replacing a system that is unsuited to meeting current and future staffing requirements. Above and beyond legal implications, the legislative reform aims at introducing cultural changes into Public Service human resources management to make it easier and faster to address human resources issues and find efficient and innovative solutions. The new legislation will be phased in over a two-year period. Emphasizing the importance of modernizing the management of human resources, the Clerk of the Privy Council Office has made the implementation of the PSMA a corporate priority for the Public Service of Canada.

The PSMA constitutes the broadest legislative reform of Public Service human resources management in over 35 years. In order to improve the hiring, learning and training of employees, as well as labour management relations and accountability, the PSMA changes four existing acts: the Public Service Staff Relations Act (PSSRA), the Public Service Employment Act (PSEA), the Financial Administration Act (FAA) and the Canadian Center for Management Development Act (CCMDA).

The modifications are designed to facilitate staffing planning and operations for managers and human resources professionals alike. Delegation of staffing authority to departments and agencies is expanded, and managers are provided with more flexibility to staff positions through a simpler system. The integration of HR and business planning, supported by staffing programs developed in-house or at the Public Service Commission, opens the way to more timely, more efficient, and better targeted staffing. Employment equity considerations are also integrated into human resources planning and staffing activities. Although merit remains the cornerstone of Public Service staffing, it takes on a different meaning. Merit used to imply the appointment of "the most qualified" candidate, but now refers to the appointment of "a qualified" candidate. The definition of qualification requirements goes beyond immediate job requirements to include the future operational needs of the organization.

The PSMA fosters better collaboration between the government and its employees' bargaining agents, moving employer-union relationships away from confrontation and toward a more conciliatory approach. Under the new Public Service Labour Relations Act (PSLRA), which replaces the PSSRA, departments and agencies will have to establish labour-management consultation committees to discuss workplace issues such as harassment and disclosure of wrongdoing. Furthermore, in line with the collaborative spirit of the new Act, departments and agencies are encouraged to work with unions to develop solutions to such issues. In consultation with bargaining agents, Deputy Heads must establish an informal conflict management system for the purpose of preventing and addressing workplace disputes.

The PSMA has replaced the Canadian Center for Management Development Act (CCMDA) with the Canada School of Public Service Act (CSPSA). As a result, the Canadian Centre for Management Development, Training and Development Canada and Language Training Canada have been integrated into a new entity: the Canada School of Public Service. The task of this new institution is to integrate and deliver learning activities for all employees.

Implications

• Implementation of the Public Service Modernization Act raises both challenges and opportunities.
• Within the next year or so, human resources professionals need to develop a thorough knowledge of the new human resources regime in order to support staffing activities (including staffing planning, support to hiring managers, etc.), more collaborative labour management relations (including conflict resolution, labour management consultation committees, new merit principle, etc.), and other aspects of human resources management modified by the PSMA (planning and delivery of learning, etc.).
• Managers at all levels of delegated authority also need to ready themselves to fulfil their staffing, planning, accountability and labour relation obligations under the new regime. In order to benefit fully from the improvements introduced in the PSMA, they must be communicated clearly; and appropriate tools (such as descriptions of best practices) and support must be provided.
• Departments and agencies must facilitate the implementation of the PSMA in their environments (including training of employees, development of tools and support mechanisms, development of the required infrastructure, etc.).
• Central Agencies must facilitate the implementation of the PSMA within the scope of their respective mandates.
• The financial resources required to implement and support the PSMA will need to remain available throughout the implementation period and until required training is completed.
• The integration of human resources and business planning may be adversely affected by simultaneous changes in organizational structures, budget allocations and priorities.
• The development of better labour management relations will require good communications, respect and effective cooperation among all stakeholders (management, employees, bargaining agents and committees).
• The modernized human resources framework provides departments and agencies with more flexibility in staffing positions. In addition, better employee-management collaboration in the identification and the resolution of workplace issues should improve workplace satisfaction on both sides. Using the informal conflict management system to address grievances at earlier stages can help reduce workplace tensions. Effective monitoring of workplace conditions can also result in more focussed efforts to prevent conflicts.

Current and Future Needs

Issue: Modernizing an Outdated Human Resources Framework (PSMA)

Trends

• The implementation of the Public Service Modernization Act over the next two years will make it easier and faster to address human resources issues, and come up with efficient and innovative solutions.
• Expanded delegation of staffing authority to departments and agencies.
• Managers gain increased flexibility in staffing positions.
• Human resources planning will be integrated with business planning and incorporate employment equity requirements.
• Although merit remains the basis for all appointments, its definition has changed.
• Employer-employee relations should be handled in a more collaborative manner than before, through labour-management consultation committees, informal conflict management mechanisms, etc.
• The Canada School of Public Service becomes the central training provider for the Public Service.

Current Needs

• The Public Service needs to ready itself to operate under the new human resources regime. This affects human resources professionals, delegated managers, departments and agencies, as well as central agencies.
• Financial and human resources need to remain available until the implementation of the Public Service Modernization Act and the related training of employees are completed.

Future Needs

• Ensure that the improvements introduced by the Public Service Modernization Act are well understood by human resources professionals and delegated managers, and used to the fullest extent.
• Optimize the match between employee training needs, organizational requirements, and the curriculum offered by the Canada School of Public Service.

Related issues in other sections

Economy and Labour Market: Labour Relations Public Service Workforce: A Human Resources Community Faced with Multiple Challenges

Accountability, Trust and Financial Management

In order to restore trust of Canadians, the Government wishes to reinforce accountability and sound financial management. This can be achieved, in part, through policies, regulations and political reforms (placing added emphasis on values and ethics, disclosure of wrongdoing protection, etc.). The Government's handling of finances and the budget will provide opportunities to influence public perceptions.

For the first time since confederation, the Government has balanced its budget for an eighth consecutive year. Moreover, the Government indicated in the October 2004 Speech from the Throne that it intends to manage finances in such a way as to avoid budgetary deficits. Consistent with this objective, in December of 2004 the Public Service workforce size was capped and reclassifications frozen.

The goals outlined in the 2004 Speech from the Throne indicated a strong commitment to restraint and financial management. Debt reduction remains a top priority, and the ratio of the debt to the gross domestic product is to be reduced from its current level of about 40% to 25% within the next ten years. As a prudent financial manager, the government maintained a $3 billion contingency reserve and a $1 billion economic prudence fund in both 2004-05 and 2005-06.

The Speech from the Throne of 2004 also reiterated the will of the Government to review its expenditures, with the intent of reallocating resources to better reflect current Government priorities and improve operational efficiency. The expenditure review aims at reallocating $12 billion over the next five years. About $2 billion of this is to be raised through cuts to non-statutory spending over the next three years. Together, these cuts will represent about 5% of current non-statutory spending and are expected to result in some job losses.

The remaining $10 billion would be generated through improvements to the efficiency of selected government operations, namely real estate management, procurement, corporate services and information technology. For example, it is believed that by selling government-owned office buildings and leasing them back, the government could generate savings of between $2.5 and $4 billion. Similarly, it is felt that consolidating and integrating corporate and administrative services, and thus reducing duplication of work among departments, will yield important savings. Initial emphasis will be put on integrating personnel, finance, inventory, and asset management. Eventually, integration could extend to records management, libraries, translation and printing.

Expenditure review is not seen as an ad hoc exercise. Starting with the 2006 budget cycle, the review of program and service expenditures will be undertaken annually.

Improved financial accountability and integrity is included in the Government's aims. The introduction of new corporate governance rules for Crown corporations and the requirement that they undergo special five-year audits, to be conducted by the Auditor General, reflect a desire to improve financial management. Similarly, the introduction of modern, real-time information systems to track all spending, and provide appropriate tools for effective scrutiny and decision-making, will support the accomplishment of the same objective.

Implications

• The Government's approach to fiscal management will affect departmental budgets, and may affect their ability to respond to human resources challenges such as reducing the use of term employment to recruit indeterminate employees; implementing strategies to delay the retirement of experienced employees; or otherwise transferring their knowledge to younger employees.
• Expenditure review could trigger additional mobility within the Public Service as employees move from lower to higher priority projects. Accordingly, employees will require flexibility and adaptability, and human resources professionals may see their workload increase. The integration of expenditure review in the annual budget preparation exercise suggests that mobility may remain significantly above its current levels.
• Expenditure review re-investment is expected to affect professional and scientific roles, while future recruitment impacts remain unclear. Reallocations and shared services initiatives may also affect the PS workforce. The greatest challenge during expenditure review implementation will be managing staff reallocations while meeting current and future recruitment needs.
• The centralization of some human resources operations under expenditure review could free up time and resources, enabling departmental human resources professionals to focus on strategic planning and analytical activities.

Current and Future Needs

Issue: Accountability, Trust and Financial Management

Trends

• The goals outlined in the 2004 Speech from the Throne indicate a strong desire to show restraint in financial management.
• The ratio of the debt to the gross domestic product is to be reduced to 25% within the next ten years.
• To avoid budgetary deficits in 2004, the Government placed a cap on salary expenditures, and a temporary freeze on reclassifications.
• A review of expenditures aims at reallocating $12 billion over the next five years: $2 billion being raised through cuts to non statutory spending and $10 billion through improvements to the efficiency of selected government operations over the next three years. These initiatives will include a consolidation of certain human resources activities across the Public Service.
• These spending cuts represent about 5% of current non-statutory spending and may result in some job losses. Close to $11-billion in savings will affect approximately 10,600 positions.
• $1.5-billion in savings is expected through administrative efficiencies over the next five years.
• Government estimates the net number of employees at risk of job loss could be as low as 2,300 and as high as 4,100 over five years depending upon attrition rates, retraining, and redeployments.
• The review of program and service expenditures is to become an annual exercise, starting with the 2006 budget cycle.

Current Needs

• Resources will need to be invested in completing the current round of expenditure reviews and implementing an annual repeat of the exercise.
• Possible job losses need to be handled appropriately.
• Consolidation of certain human resources activities will deeply affect the manner in which targeted personnel and finance operations are handled by departments.

Future Needs

• Human resources professionals need to be prepared to handle an increased workload in areas where expenditure review generates a large volume of redeployments.

Related issues in other sections

Economy and Labour Market: Fiscal policies of the Government Economy and Labour Market: Labour Relations Society and Culture: Social Values and Ethics Politics and Governance: Having a Minority Government Public Service Workforce: A Human Resources Community Faced with Multiple Challenges

Supporting Government's Commitments

The spending priorities established by the Government in the budget have translated into concrete terms the commitments made in the Speech from the Throne, and in federal-provincial agreements, etc. The last budget included measures to deal with important health issues. In particular, it allocated an additional $2 billion to Provinces and Territories for health care, bringing to $36.8 billion the funding provided under the February 2003 Ministers Accord on Health Care Renewal. Moreover, it supported the establishment of the Canada Public Health Agency as a focal point for disease control and emergency response.

Commitment to Aboriginal issues translated into an investment of $125 million over five years for the Aboriginal Human Resources Development Strategy, and the doubling of financial support for the Urban Aboriginal Strategy, bringing its funding up to $50 million. Some tax relief was offered to Canadians with disabilities and caregivers, as well as to registered charities, along with continued support for the Voluntary Sector Initiative.

Investments in learning took various forms. There was an extension of the education tax credit to employees pursuing career-related studies at their own expense. New funding of $15 million a year was allocated to support of enhanced language training to reduce labour market barriers faced by immigrants. Research and development also benefited from the 2004 budget, with the annual funding of Canada's three federal granting councils being increased by $90 million. Over the past seven years, federal support for research, especially at universities, colleges and research hospitals, has increased by some $9 billion.

Finally, an additional $605 million was committed to address security issues.

Implications

• Investments in health care may translate into additional work for the Public Service, particularly as it relates to the Public Health Agency and the establishment of national health care standards.
• To the extent that it affects their availability in the labour force, budget spending for Aboriginal peoples, persons with disabilities and visible minorities could have an impact on their workforce availability.

Current and Future Needs

Issue: Supporting Government's Commitments

Trends

• The 2004 budget included measures to deal with important health issues, including support for the establishment of the Canada Public Health Agency.
• Funding was allocated for Aboriginal peoples, persons with disabilities, and immigrants.
• Financial support for research and development was increased.
• An additional $605 million was committed to address security issues.

Current Needs

• Priority put on health issues could have an impact on workforce needs in specific sectors of the Public Service.

Future Needs

• Improvements in the representation of designated group members in the Canadian labour force will need to be reflected in the Public Service workforce.

Related issues in other sections

Population: An Increasingly Diverse Society Population: A Younger Population of Aboriginal Peoples Population: Persons with Disabilities Population: Linguistic Composition Society and Culture: Security and Crime Science and Technology: Commitment to Research and Development Public Service Workforce: Increasing Employment Equity Expectations