Nearly all federal executives receive annual bonuses, regardless of performance

The overwhelming majority of federal managers receive year-end bonuses, regardless of whether they meet their departmental performance targets, according to a new report from the Treasury Board.

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The overwhelming majority of federal managers receive year-end bonuses, regardless of whether they meet their departmental performance targets, according to a new report from the Treasury Board.

The report stated that 90 to 100 per cent of federal executives are getting such bonuses annually, with 6,738 executives, or “98 percent across the core public administration,” receiving a bonus in 2023.

First covered by Blacklock Reporter, the report, titled “Follow-Up Responses,” was released in response to a hearing on November 18, when Senator Clément Gignac demanded to know why bonusing did not reflect private sector practices.

“In the private sector, you know how it works,” he said. “Directors get bonuses based on whether or not targets are met. How does it work in the public sector?”

The Treasury Board responded during the Senate national finance committee, saying that bonuses reflect “broad, high-level targets for organizational performance outcomes.”

Gignac followed up by asking whether there was any “connection between departmental results and the compensation paid to government officials?”

Comptroller General Annie Boudreau replied that there “are various components.”

While the follow-up responses explained that “performance pay is a key component of executive compensation in the federal public service,” it said that it wasn’t an “automatic entitlement.”

“Each year, a portion of executives’ total compensation is held back and only paid if an employee’s manager determines they have met the objectives outlined in their performance agreements, which are set annually. This ensures accountability for results,” reads the report.

However, it did not explain the extremely high rates of those receiving bonuses.

For example, every single executive with the Canada Infrastructure Bank received a bonus worth the equivalent of $85,200 each in 2022.

VIA Rail executives were paid the equivalent of $10,000 in bonuses during pandemic lockdowns, which were sent out to 650 managers while the railway simultaneously laid off 28 per cent of its staff.

Additionally, the Public Sector Labour Relations and Employment Board ruled in 2019 that “withholding of pay increments for poor performance is not permissible.”

Meanwhile, the board dismissed a 2024 case involving a complaint by a $177,000-a-year manager at the Canada Revenue Agency after she was docked a $4,995 bonus because she was not at work.

The Parliamentary Budget Office has dismissed “performance outcomes” as setting a “self-serving” precedent.

“They generally tend to be not overly ambitious, which leads to a surprise when you see that close to half are either not met or have no target for meeting them,” said then-Parliamentary Budget Officer Yves Giroux during a hearing of the Commons government operations committee in 2023.

Giroux further elaborated on the issue during the Senate national finance committee.

“The targets in Departmental Results reports are determined in large part by the public servants responsible for delivering the programs themselves: assistant deputy ministers, approved by deputy ministers, approved by ministers. But in my experience, ministers are not very well equipped to challenge their own officials,” he said.

“We end up in a situation where it is public servants responsible for delivering programs that set their own targets, and they usually set the bar not too high so it doesn’t look too easy, but neither too low so it’s fairly easy to achieve most of the time. Yet by their own assessment, they fail to deliver on many of these. So there is a system that is broken.”