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 October 12, 2021 covers the period from March 15, 2020 to July 31, 2021 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 July 31, 2021.[iii]

Consistent with our prior findings, use of 699 leave continues to decrease (Figure 1).  After reaching a peak of 1.75 million hours in the week ending April 5, 2020, the number of weekly hours of leave has decreased by 99% to 24 thousand hours in the last week of July 2021.  On November 9, 2020 TBS enacted 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.[iv]  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 between 104 thousand and 129 thousand.  In the following four weeks (November 9 to December 12, 2020), that number nearly fell by half and was now between 60 thousand and 66 thousand hours per week.  The weekly number of hours continued to steadily decrease in the following weeks, except for a short increase in the spring of 2021, which corresponds to the third wave of the pandemic where many schools closed for a few weeks.

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.

While the total number of hours of 699 leave has significantly reduced over the weeks, the average number of weekly hours of leave per distinct employee using 699 leave during that week has remained somewhat stable around an average of 22 hours.  Figure 2 presents the evolution of the average weekly hours of 699 leave per distinct employee using the leave.  The dashed line represents the weekly hours adjusted for holidays and differs from the solid line only in weeks where there was a statutory holiday.[v]  The week of December 7 to 13, 2020 is somewhat of an outlier with employees using on average 43.5 hours of 699 leave during that week.  The government of Quebec had announced in late November 2020 that schools would be closed from December 17 to 23, 2020 (the week following the unusual spike).  As we know that leave usage was not always reported in the period used for some organisations, it is possible that federal employees living in Quebec and planning to be on leave the following week to take care of their school aged children have entered their leave in the system the week before.

Figure 2: Weekly hours of 699 leave per distinct employee using 699 leave

Sources: Treasury Board Secretariat of Canada and PBO calculations

Since weekly hours of leave per employee have not reduced significantly, most of the reduction in usage is explained by a reduction in the number of employees using 699 leave.  The number of distinct employees using 699 leave peaked in the week ending April 5, 2020 at almost 60,000 and has steadily decreased since, to a low of 1,000 in the last week of July 2021, as is shown in Figure 3.  It is also interesting to note from Figure 3 that the number of employees using 699 leave is less subject to the end-of-month fluctuations witnessed in the number of hours in Figure 1.

Figure 3: Number of distinct employees taking 699 leave

Source: Treasury Board Secretariat of Canada

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.  The data the PBO received from TBS on October 12, 2021 was the first not to report an increase in the number of hours of 699 leave in March 2020 compared to the previous data update (which was received on July 27, 2021).  Nonetheless, the latest data update shows an increase from the previous update of almost 4,000 hours for the months of April, May and June 2020.  This represents an increase of less than 1% in the total number of hours reported between April and June 2020, but it shows that organizations are still updating 699 leave usage of their staff more than a year after that leave was taken.  Out of 90 organizations, TBS only reported on 62 of them in June 2020 and increased progressively to 86 since late November 2020.  It will have therefore taken eight months for some organizations to report on their 699 leave usage in the beginning of the pandemic.

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 $1.27 billion between March 2020 and July 2021 for leave taken under code 699, inclusive of pension and other benefits.[vi]  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 against the government because of the new guidelines that became effective in November 2020.[vii]  Depending on the outcome of the dispute, the costs associated with 699 leave in Table 1 for the months of November 2020 and after 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 July 31, 2021

	Cost Estimate ($ millions)	Employee Count	Average expenditure per employee ($)
March 2020	194.3	65,107	2,984
April 2020	315.7	74,876	4,216
May 2020	235.6	65,649	3,589
June 2020	163.6	49,832	3,283
July 2020	98.5	32,605	3,022
August 2020	51.6	21,786	2,369
September 2020	42.8	20,978	2,038
October 2020	36.7	16,155	2,271
November 2020	20.4	9,566	2,132
December 2020	18.0	6,743	2,668
January 2021	17.7	7,626	2,318
February 2021	13.6	5,519	2,461
March 2021	13.7	5,633	2,436
April 2021	15.8	7,074	2,231
May 2021	14.5	6,887	2,106
June 2021	11.6	5,257	2,204
July 2021	5.8	3,166	1,843
Total	1,269.9	133,013	9,547

Sources: Treasury Board Secretariat of Canada and PBO calculations.

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.

The total cost shown in Table 1 represents an 8% increase from our previous update published on March 2, 2021.  The increase comes from the addition of eight months of data (the months of December 2020 to July 2021).  We now also have enough data to estimate the total cost for fiscal year 2020-21, which amounts to $1,028 million.

As previously reported, the Canada Revenue Agency (CRA) is responsible for most of the 699 leave, representing (as of July 31, 2021) 43% 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 and Correctional Services Canada are the only organizations to appear in the top 5 every month since the beginning of the pandemic.  The Canada Border Services Agency appears in the top 5 for 15 of the 17 months of data available while National Defence appears 14 times.  Most departments reported their total highest hours in April 2020 (18) or May 2020 (37).  Only seven departments reported more hours used in June 2020 than in April or May, and two reported more hours in July 2020 than any other month.

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

March 2020			April 2020
Canada Revenue Agency	2,603,410	74%	Canada Revenue Agency	3,392,753	60%
Correctional Service Canada	165,131	5%	Correctional Service Canada	340,769	6%
Employment and Social Development	141,360	4%	Employment and Social Development	186,757	3%
Statistics Canada	118,336	3%	Immigration, Refugees and Citizenship	158,396	3%
Canada Border Services Agency	112,676	3%	RCMP (Civilian Staff)	157,916	3%
Total Top 5 Organizations	3,140,912	89%	Total Top 5 Organizations	4,236,592	75%
May 2020			June 2020
Canada Revenue Agency	1,713,886	42%	Canada Revenue Agency	911,456	32%
Correctional Service Canada	356,107	9%	Correctional Service Canada	264,748	9%
Employment and Social Development	246,613	6%	National Defence	205,004	7%
Immigration, Refugees and Citizenship	164,287	4%	Immigration, Refugees and Citizenship	161,142	6%
Canada Border Services Agency	136,786	3%	Employment and Social Development	138,222	5%
Total Top 5 Organizations	2,617,678	64%	Total Top 5 Organizations	1,680,571	59%
July 2020			August 2020
Canada Revenue Agency	317,789	19%	Canada Revenue Agency	136,761	16%
Correctional Service Canada	189,087	11%	Correctional Service Canada	111,337	13%
National Defence	166,990	10%	Canada Border Services Agency	93,206	11%
Canada Border Services Agency	108,437	7%	National Defence	61,504	7%
Immigration, Refugees and Citizenship	107,511	6%	Employment and Social Development	59,367	7%
Total Top 5 Organizations	889,815	54%	Total Top 5 Organizations	462,176	54%
September 2020			October 2020
Correctional Service Canada	119,136	17%	Correctional Service Canada	143,375	24%
Canada Revenue Agency	95,571	14%	National Defence	118,251	20%
National Defence	79,358	11%	Canada Border Services Agency	64,718	11%
Canada Border Services Agency	77,529	11%	Canada Revenue Agency	59,708	10%
Employment and Social Development	42,811	6%	RCMP (Civilian Staff)	26,948	4%
Total Top 5 Organizations	414,406	59%	Total Top 5 Organizations	413,000	69%
November 2020			December 2020
Correctional Service Canada	83,782	25%	National Defence	95,422	33%
National Defence	54,161	16%	Correctional Service Canada	56,429	19%
Canada Border Services Agency	47,342	14%	Canada Border Services Agency	38,779	13%
Canada Revenue Agency	42,948	13%	Canada Revenue Agency	37,247	13%
RCMP (Civilian Staff)	24,747	7%	RCMP (Civilian Staff)	12,043	4%
Total Top 5 Organizations	252,980	76%	Total Top 5 Organizations	239,921	83%
January 2021			February 2021
Correctional Service Canada	62,425	21%	Correctional Service Canada	51,167	23%
Canada Revenue Agency	56,700	19%	National Defence	46,081	21%
National Defence	47,090	16%	Canada Border Services Agency	40,828	18%
Canada Border Services Agency	46,810	16%	Canada Revenue Agency	33,633	15%
RCMP (Civilian Staff)	14,459	5%	RCMP (Civilian Staff)	9,834	4%
Total Top 5 Organizations	227,484	78%	Total Top 5 Organizations	181,543	82%
March 2021			April 2021
Correctional Service Canada	52,311	23%	Correctional Service Canada	57,621	22%
National Defence	46,763	21%	Canada Revenue Agency	52,191	20%
Canada Revenue Agency	37,274	17%	National Defence	51,443	20%
Canada Border Services Agency	35,494	16%	Canada Border Services Agency	42,931	17%
Employment and Social Development	7,047	3%	RCMP (Civilian Staff)	7,171	3%
Total Top 5 Organizations	178,888	79%	Total Top 5 Organizations	211,356	81%
May 2021			June 2021
Canada Revenue Agency	56,973	24%	Canada Border Services Agency	41,311	21%
Correctional Service Canada	48,904	20%	Canada Revenue Agency	39,820	21%
Canada Border Services Agency	44,193	18%	Correctional Service Canada	35,146	18%
National Defence	28,346	12%	National Defence	23,502	12%
Employment and Social Development	9,288	4%	Employment and Social Development	8,379	4%
Total Top 5 Organizations	187,705	78%	Total Top 5 Organizations	148,157	77%
July 2021			MARCH 2020 TO JULY 2021
Correctional Service Canada	24,806	26%	Canada Revenue Agency	9,597,204	43%
Canada Border Services Agency	24,028	25%	Correctional Service Canada	2,162,281	10%
National Defence	12,221	13%	National Defence	1,240,998	6%
Canada Revenue Agency	9,082	10%	Canada Border Services Agency	1,240,150	6%
Employment and Social Development	3,066	3%	Employment and Social Development	992,666	4%
Total Top 5 Organizations	73,203	77%	Total Top 5 Organizations	15,233,299	69%

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, 2020 and July 31, 2021 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 167 hours per employee.  Thus, the ten 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 nearly four times as high as the second organization and more than six 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 2020 to July 2021) – Top 10 organizations

Organization	Number of hours of leave per employee using 699 leave
Office of the Governor General's Secretary	1,016
Statistical Survey Operations	261
Parole Board of Canada	249
Immigration and Refugee Board of Canada	228
National Defence	224
Courts Administration Service	219
Canada Revenue Agency	212
Indian Oil and Gas Canada	209
Agriculture and Agri-Food Canada	199
Correctional Service Canada	194
Public service average	167

Sources: Treasury Board Secretariat of Canada and PBO calculations

Table 4 provides another measure of intensity in terms of the cost of 699 leave divided by personnel spending.[viii]  At the height of 699 usage in April and May 2020, we can see that the Canada Revenue Agency, the Immigration and Refugee Board of Canada, and Veteran Affairs Canada were the three departments with the most intensive usage.  However, for the full data sample (March 2020 to July 2021), the Office of the Governor General’s Secretary still had the most intensive usage of 699 leave (representing 11% of all their personnel cost over the same period), followed by the Canada Revenue Agency (9%) and the Immigration and Refugee Board of Canada (6%).

Table 4: Cost of 699 leave usage as a percentage of personnel spending

Organization	April 2020	May 2020	March 2020 to July 2021	Rank (Mar. '20 to Jul. '21)
Canada Revenue Agency	52%	26%	9%	2
Immigration and Refugee Board of Canada	29%	29%	6%	3
Veterans Affairs Canada	19%	16%	3%	6
Canadian Heritage	16%	11%	2%	15
Office of the Governor General's Secretary	15%	17%	11%	1
Statistics Canada	14%	16%	4%	5
Library and Archives Canada	14%	12%	3%	7
Immigration, Refugees and Citizenship Canada	13%	14%	3%	8
Canadian Nuclear Safety Commission	13%	7%	3%	10
Correctional Service Canada	12%	13%	5%	4
Public service average	8%	6%	2%	-

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.).[ix]  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 2020), followed by family care.  For the following months (June to September 2020), family care was the main reason for taking 699 leave (representing between 26% and 34% of all 699 leave).  In October 2020, illness was now the primary reason, representing 29% of all 699 leave in that month.  Then in November 2020, a new category named high risk was introduced.[x]  For the remaining months, the combination of illness/high risk was the main reason except in June 2021, where family care slightly surpassed it (35% vs 34%).  Since the beginning of the pandemic, work limitation represents 40% of all hours reported, followed by family care at 31%, technology at 16%, illness at 11% and high risk at 3%.

Figure 4: Monthly breakdown of 699 leave by type

Source: Treasury Board Secretariat of Canada

With work limitation and technology representing together more than half of all 699 leave since the beginning of the pandemic, it seems to suggest that many federal organizations were ill-prepared for a switch to remote working.  It is also concerning that technology still represents on average 8% of all 699 leave taken since March 2021, which is over a year after the pandemic has started.  In the case of Statistical Survey Operations (which operates within Statistics Canada), technology represents over 70% of all 699 leave taken every month since October 2020.

It is also interesting to note that while work limitation was the cause behind most of the hours of 699 leave taken, for the months of April to October 2020 more than half of the organizations for which a breakdown by cause was provided reported family care as the main reason for 699 leave.  Since CRA was a heavy user of 699 leave in the beginning of the pandemic with all taxpayer audits on pause (which fell under work limitation), it can explain why work limitation was the main cause in terms of all hours across the public service.

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