ARCHIVED - Appendices to the Expenditure Review of Federal Public Sector Compensation Policy and Comparability

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Appendix A - Terms of reference

Note Regarding the Terms of Reference

Expenditure Review of Federal Public Sector Compensation Policy and Comparability

The mandate of the Expenditure Review of Federal Public Sector Compensation Policy and Comparability is outlined in the Treasury Board Secretariat publication, The Expenditure Review Committee: A Catalyst for Modernizing Management Practices, dated March 24, 2004. The Review was undertaken with the objective of:

examining compensation within Government, as well as identifying any trends and options for managing these costs into the future. It includes comparisons with other levels of Government, the public sector in other countries, as well as comparably large private sector organizations in Canada.

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Compensation costs the federal government well over $25 billion per year. The existing structure and levels of compensation are the result of an accumulation of collective bargaining agreements and policy decisions over many years. Although a draft compensation policy framework was prepared recently, there has been no comprehensive review in this area for decades. Accordingly, it was considered timely to include compensation as one of the new Government's horizontal management expenditure reviews.

The Review covers the six "domains" of federal compensation:

• the core public service, that part of the public service for which the Treasury Board is the employer,
• separate employers;
• the armed forces;
• the uniformed RCMP and civilian employees covered by the RCMP Act;
• federal business enterprises; and
• other groups such as judges.

The main emphasis is on the first four domains, especially the core public service and separate employers.

The components of total compensation to be considered include: salaries and wages; overtime and allowances; recruitment and retention (known as terminable) allowances; insurance and other benefits; pensions; pay equity; and various forms of leave.

Topics to be examined include:

• What are our current expenditures on compensation?
• What have been the trends since 1990?
• How do these trends, and the actual levels of public service compensation, compare with the external labour market? How can comparability be assessed?
• What compensation approaches would best encourage the public service we want for the next generation?
• What are the main issues regarding federal public sector compensation, and how could they be addressed? Examples of such issues include: regional vs. national pay rates; classification reform; equal pay for work of equal value (known as pay equity); the future of terminable allowances; the potential for rewarding skills and performance; the impact of large separate employers.
• How do other large employers (i.e. key provinces, major private companies, similar foreign governments) manage and control compensation, and what has their experience been?
• How could we introduce change into the compensation system?

 

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