Leaner Ottawa Awaits the Cuts

By February 15, 2016Press

LEANER OTTAWA AWAITS THE CUTS

LUKE FISHER in Ottawa

Before last week’s federal budget, predictions of looming economic disaster were common in the Ottawa region.

But in the wake of Finance Minister Paul Martin’s announcement that fully one- third of the 45,000 public service jobs that will be cut in the next three years are in the capital, local business and political leaders were saying that those gloomy forecasts were greatly exaggerated.

The surprisingly optimistic tone in Canada’s fourth-largest city was illustrated by a hopeful headline in The Ottawa Citizen: “Capital will survive budget cuts.”

Mayor Jacquelin Holzman led the chorus, saying that increased dependence on the private sector is “great,” and pointing to the region’s booming high-tech and tourism industries as the engine of future economic growth. “The capital,” said Holzman, “is not just a government town any more.” While the shrinking federal government now employs 73,336 in the region, high4ech firms like soft- ware success stories Newbridge Networks Corp. and Corel Corp. continue to grow, employing more than 30,000. Other officials maintained that while 15,000 job losses over three years may seem devastating, the figure is misleading because up to 9,000 of them are expected to retire as planned, take early retirement or accept generous cash buyouts — at a cost to the government of about $440 million.

Until the budget, real estate sales in the Ottawa area had been sluggish, with sales in January down 48 per cent from the same month a year before. But veteran real estate agent Joan Smith predicted that the market may pick up soon. “People were prepared for a lot worse than what we saw,” she said. Still, the impending layoffs will hit many families severely ensuring that many Ottawans continue to delay major decisions like buying a new home.Much less optimistic was the Public Service Alliance of Canada, which represents 48,000 government employees in the region. Spokesman Alan Pryde scoffed at the ability of local business to absorb the cuts, predicting that many university graduates will be forced to accept low-paying jobs with little future. Federal Industry Minister John Manley countered that “the total hit over three years is less than the number of jobs created in the last year.” In fact, more than 17,000 jobs were created in the Ottawa region last year.So, will a leaner capital be able to shake its image as fat city? Willy Bagnell, president of the Ottawa-Carleton Board of Trade, said that common national perception was always a myth. “The rest of the country,” said Bagnell, “is just waking up to the fact that government is not the only game in this town.”