According to John Maynard Keynes' economic theory, during economic downturns with high unemployment, governments should actively increase spending, such as on hiring public works, to inject purchasing power into the economy and boost demand, thereby stimulating employment and preventing prolonged stagnation. The unemployment rate in Canada is 7.1% in August, and it is expected to continue growing. The government should spend more money and hiring instead of laying off people.
Why does the Canadian government have to cut 15% spending by 2029 when a tough economic time is about to come? It goes opposite direction to Keynes'
1. The assistant deputy minister (ADM) — the second-highest-ranking position in most departments — cadre ballooned by 50 per cent (or 140) since 2015 ( Justin Trudeau was elected). An ADM’s salary ranges from $197,774 to $260,719 (not to mention how many ministries the Trudeau government increased).
2. During the COVID-19 pandemic beginning in 2020. Over Trudeau's tenure, the unemployment rate was relatively lower, but the public service grew by over 100,000, from 257,000 in 2015
to 358,000 this year, according to government data (Quoted from Financial Post).
3. A recent report by the Public Service Management Advisory Committee warned that there are too many executives overall in the public service. Nearly half of all departments in the core public service are above the recommended average number of executives, according to the committee.
4. The Parliamentary Budget Officer said earlier this month that for the fourth year in a row, the government said, ‘don’t worry, next year we’re going to reduce the number of full-time equivalents in the federal government,’ and then they blew past it again.