Is outsourcing work at Veterans Affairs bad for vets?

Veterans Affairs has been in the news a lot these days -- proving "there's no such thing as bad publicity" isn't always true.

The department is under pressure from veterans for slashing services, including the planned closure ofnine offices across the country.

According to Public Accounts of Canada, Veteran Affairs, responsible for delivering benefits and aid to hundreds of thousands of veterans, has been quietly cutting full-time departmental staff while outsourcing work.

Since 2009-2010, Veterans Affairs has trimmed over $12.5 million from its in-house labour costs, while increasing spending on outside contractors by over $20 million.

Veterans Affairs labour costs

Veterans Affairs isn’t the only federal department that is turning to outside contractors.

Professional service costs at Human Resources and Skills Development Canada jumped 22% between 2009-2010 and 2012-2013, an increase of nearly $117 million. In-house labour costs dropped about $104 million in this same period.

Other departments have shown the same trend since 2011-12. (For over-time changes for all government departments, see this data set. In-house personnel costs include both employee salaries as well as health, employment and other benefit costs.)

Last year, Health Canada cut its in-house personnel budget by almost $12 million from the previous year, as the cost of professional services went up about $26 million. Agriculture Canada reduced spending on in-house labour by about $24 million, while spending on outside contractors went up about $17 million (of which $13.5 million was spent by the Canadian Food Inspection Agency).

Public Safety, one of the Conservative government's priority departments, bucked this trend, and saw an increase in spending on in-house labour. The department spent $747 million more last year compared to 2009-2010 (a 12% increase), but $162 million less on external consultant services (a 13% drop).

Over at Environment Canada, which nobody could credibly claim is a priority area for the Conservative government, spending on both in-house labour and outside contractors is down since 2009-2010 (by about $23 million for in-house personnel and over $100 million for contractors).

Government-wide, though, spending on professional services is up since the Conservatives came to power in 2006.

An analysis done by the Toronto Star shows that as the Conservatives set out to reduce the size of the public service, spending on outside professional services went up. Between 2006-2007 and 2012-13, it jumped to over $10 billion a year, representing a 28% increase since the Conservatives were first elected.

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