Update: Cost of Federal Leave for COVID-19

On July 24, 2020 the Parliamentary Budget Officer (PBO) reported on costs incurred from the Government’s policy of allowing employees to use pay code 699 paid leave for other reasons.[i]  Guidance from the Treasury Board Secretariat (TBS) allowed for employees to request 699 leave for a variety of reasons including being sick with COVID-19, having to quarantine, not being able to access the technology they need to complete their work, and having to care for dependents.

Through information request IR0504 (July 2020), the Government subsequently shared new data which the PBO used to provide updates on the evolution of these costs.[ii]  The most recent data update received by the PBO on February 1, 2021 covers the period from March 15 to November 30, 2020 for 86 of the 90 federal public service organizations governed by the Financial Administration Act Schedules I, IV and V.  These 86 organizations represent 99% of federal public servants employed as of November 30, 2020.

Consistent with our prior findings, use of 699 leave continues to decrease (Figure 1).  After reaching a peak of 1.72 million hours in the week ending April 5, the number of weekly hours of leave has decreased by 97% to 51 thousand hours in the last week of November.  On October 22, 2020 the Chief Human Resources Officer from TBS provided new guidance on 699 leave, namely that it will be granted on a case-by-case basis and generally only after other relevant paid leave has first been used by the employee.[iii]  These new guidelines were effective starting on November 9, 2020. The data shows that in the four preceding weeks (October 12 to November 8, 2020) the weekly number of hours of 699 leave taken was relatively stable and hovered slightly above 100 thousand.  For the three following weeks (November 9 to 29, 2020), that number fell by half to slightly more than 50 thousand hours per week.

Figure 1: Weekly breakdown of 699 leave

Sources: Treasury Board Secretariat of Canada and PBO calculations

As explained in the previous reports, there are spikes in the weekly data because of a tendency to record leave usage at the end of the month rather than when it is taken, and dips because of statutory holidays.  Therefore, the dashed line in Figure 1 shows the average number of hours of leave per business day and the dotted line is a four-week moving average to better represent what the weekly usage of 699 leave would have been if not for this end-of-month anomaly.

As indicated previously, the usage of 699 leave was likely underreported by many organizations. Indeed, in each subsequent data update provided by TBS, there was an increase in the number of hours previously reported.  For example, the data the PBO received on July 10, 2020 represented an increase of 9% in the total number of hours reported between March and May 31, 2020 from the data received on June 11, 2020 covering the same period. Figure 2 shows the evolution of the weekly hours reported between March and July 2020 in each data update received by the PBO.  Most of the increase between each update comes from the inclusion of additional organizations.  Out of 90 organizations, TBS reported on 62 of them in June 2020, increasing to 86 in February 2021.

Figure 2: Total number of hours of 699 leave reported in each data release by TBS

Source: Treasury Board Secretariat of Canada

Nonetheless, there was an increase in the number of hours reported in each update among the 43 organizations on which TBS individually reported on in June 2020.[iv]  Figure 3 depicts the evolution in the total number of hours of 699 leave reported between March 15 and May 31, 2020 (the initial reporting period of the first data release by TBS) for the 43 organizations on which individual data was reported in the first data release. As can be seen, this number went from 10.7 million hours to nearly 12 million hours in the last data update, a 12% increase. This shows that organizations were still updating the number of hours recorded between March and May several months later.

Figure 3: Total hours of 699 leave usage between March 15 and May 31, 2020
in the 43 organizations included in the first data release, by data release

Sources: Treasury Board Secretariat of Canada and PBO calculations
Note: The arrows represent the percentage change between each data release.

As mentioned in the previous reports, TBS was unable to provide actual personnel expenditures for the survey period.  Using 2018-2019 personnel expenditure data provided through information request IR0074, the PBO estimates a cost of nearly $1.2 billion between March and November 2020 for leave taken under code 699, inclusive of pension and other benefits.[v]  This includes PBO’s extrapolation of costs for the departments for which no data are available.  Note that unions representing public servants have filed policy grievances with the government because of the new guidelines effective in November.[vi]  Depending on the outcome of the dispute, the costs associated with 699 leave for November in Table 1 could be significantly higher. The costs of 699 leave presented in Table 1 do not, for the most part, involve additional spending for the federal government but are instead costs in terms of lost hours of output.  However, if the policy grievances are settled in favour of the employees, this could involve additional spending for the government.

Table 1:  699 Leave Estimated Costs March 15 to November 30, 2020

Note:  Employee count indicates the number of distinct employees who requested at least one type of COVID-related 699 leave each month. The total indicates the number of distinct employees who requested at least one type of COVID-related 699 leave since March 15, 2020 and does not equal the sum of monthly employee counts since the same employees could be using the code multiple times over the period.Sources: Treasury Board Secretariat of Canada and PBO calculations.

The total cost shown in Table 1 represents a 9% increase from our previous estimate.  Almost all the increase (99.9%) comes from the additional months of data provided (September to November).  Less than 0.1% of the increase stems from upward adjustments to data for the period covered in our previous update.  Note that the monthly totals in Table 1 are not comparable to those presented in our previous update.  In the previous data updates, TBS calculated monthly totals by summing the weekly totals of every week ending in a given month.  For example, the week of April 27 to May 3, 2020 was included in the monthly total for May.  However, in the most recent data update from TBS, the leave usage between April 27 and 30 is now counted in April’s total.

As previously reported, the Canada Revenue Agency (CRA) is responsible for most of the 699 leave, representing (as of November 30) 42% of the total cost since the beginning of the pandemic.  Table 2 shows the five organizations with the highest hours used per month and their respective percentage of total hours.  The CRA continues to account for a decreasing share of hours used, from 73% in March to 14% in November. Most departments reported their total highest hours in April (19) or May (36). Only 6 departments reported more hours used in June than in April or May.

Table 2: Departments with highest hours of 699 leave used – Hours and Percentage of Total Hours

Sources: Treasury Board Secretariat of Canada and PBO calculations

It is no surprise that the organizations with the highest total hours of 699 leave are generally those with the largest workforce.  However, in terms of intensity of usage, some smaller organizations have reported a higher number of hours of leave per employee using 699 leave.  Table 3 presents the average number of hours of 699 leave used per employee for the 10 organizations with the most intensive use.  The average hours per employee is obtained by adding all 699 hours between March 15 and November 30 and dividing it by the number of distinct employees using a 699 leave at least once during that period.  Note that the average across all organizations is 169 hours per employee. Thus, the 10 organizations in Table 3 are all above the average.  Most notably, the Office of the Governor General’s Secretary is somewhat of an outlier, reporting a value more than twice as high as the second organization and nearly four times higher than the average across the public service.

Table 3: Average number of hours of 699 leave per employee using 699 leave at least once (March to November 2020) – Top 10 organizations

Sources: Treasury Board Secretariat of Canada and PBO calculations

Finally, Figure 4 presents the breakdown of hours by type of 699 leave (leave for technology reasons, sick leave, family leave, etc.).[vii]  Excluding hours for which the reason is not provided, work limitations were the main cause for using 699 leave in the beginning of the pandemic (April and May), followed by family care. For the following months (June to September), family care was the main reason for taking 699 leave (representing between 27% and 34% of all 699 leave).  In the last two months of data, illness is now the primary reason, representing 26% of all 699 leave in October and 38% in November.[viii] However, since the beginning of the pandemic, illness represents only 6% of all hours reported, while work limitations and family care represent 27% and 20% respectively.

Figure 4: Monthly breakdown of 699 leave by type

Source: Treasury Board Secretariat of Canada

The PBO will continue to monitor and report on expenditures related to the usage of COVID-19 related leave in the federal public service.

Appendix A

• Monthly 699 leave usage by department (March to November ; .xlsx)