With tensions high and council split, Mayor Rob Ford needs votes to usher through the cuts he’s proposing for the city. So far, he’s won every critical vote he’s faced on council. But cracks in his ranks are showing: councillors Karen Stintz, the TTC Commissioner, and Francis Nunziata, the council speaker, have both spoken out against the prospect of library closures.
Now, one of Ford’s most reliable council allies is questioning the mayor’s plan to slash the city’s workforce. Councillor James Pasternak says the proposed buyout of up to 17,000 employees and the elimination of their positions could lead to “the best and brightest” leaving Toronto for other cities or the provincial or federal governments.
“You just have to worry about a brain drain for people who are at the prime of their career and have great talent that’s hard to find,” says Pasternak, who represents Ward 10 York Centre. “They’re the ones who make cities function. They’re the ones who we need.”
“There’s always a risk when you’re trying to reduce your workforce and you’re trying to get people to take a package and leave, that you’re future goes with it,” he says.
The “Voluntary Separation Program,” announced on July 12, offers employees up to half a year’s salary, depending on the length of their service. City employees have until September 9 to apply; the buyout package will need to be approved by council on September 26.
City unions are none too happy with the proposal. “CUPE Local 79 does not think the Voluntary Separation Program compensation is a great deal,” their website says, arguing that for longer-term employees, mandatory severance pay would work out to about the same amount.
Pasternak says there are better alternatives to the city’s buyout offer, like encouraging early retirement or “gapping,” the practice of not hiring replacements for retiring city employees.
Bruce Anderson, the city’s Executive Director of Human Resources, says applications for the buyout will be considered on a case-by-case basis, and this may help limit the impact of a brain drain.
“You voluntarily apply, but only those people who are approved by management will actually be able to go,” he says.
However, he says, other staff will be laid off as a result of the city’s service review, whether or not they applied for a buyout.
When staffers leave their jobs under the buyout program, their positions will be eliminated as well. The impact of eliminating each position on service provision will be one of the main factors in deciding whether city managers accept buyout applications, Anderson says .
The buyout will also result in a temporary spike in spending as the city pays out its severance packages. City Council will have to approve the total buyout package; Pasternak says the buyout money will come from a small surplus from the current fiscal year.
The buyout is just one part of the administration’s cost-cutting agenda.
The core services review—the process that led to an all-night marathon of deputations protesting cuts last week—is also underway. However, the city manager’s recommendations for those cuts will come before the deadline for buyout applications. (The results will be voted on at the same September 26 council meeting.)
The city will tell staff if they’re leaving their job from October 1 and December 31. The timing may make the decision to apply for a buyout more difficult for city staff, but Anderson says the city needs to move fast if it’s going to fight the projected $774 million budget shortfall. “If we wait until after all that’s done we’ll be much later in the process and we won’t achieve the savings when we need to achieve the savings.”
Based on his experience at the Toronto District School Board, where he was audit committee chair, Pasternak says it taught him that savings from reducing staff or the operation of buildings are often delayed.
“When you’re mothballing an asset, it takes six months to a year [to have savings],” Pasternak says. “We found that at the school board with the pools. You think you shut a pool down that’s costing you a million dollars a year. You never see the savings of a million you see half a million because even something that’s shut down costs money to maintain.”