Not any more

Tories won’t share cost-cutting plan, budget watchdog complains – The Globe and Mail

In Canada on November 3, 2010 at 13:09

The Harper government has a cost-cutting plan to balance the books within five years – it just won’t hand it over to the Parliamentary Budget Officer or tell Canadians about it.

A new report from budget officer Kevin Page, which concludes there is an 85 per cent chance that Ottawa will fail to balance the books within five years, says the government is refusing to detail where promised cuts will be made.

More related to this story

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Stockwell Day’s letter to Kevin Page – Aug. 6, 2010

Treasury Board President reponds to Parliamentary Budget Officer

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“In light of the size of the required reduction in the growth of operating expenses, PBO requested details regarding how the Government intends to achieve its planned operating budget freeze over the projection period,” Mr. Page writes. “However, the Government has indicated that this information is a Cabinet confidence and will not be released to the public.”

As part of his report, he posted a letter sent to him by Treasury Board President Stockwell Day in August explaining why further information would not be released until a later date.

Mr. Day said the information could not be provided when asked because it relates to financial decisions that have yet to be approved by cabinet’s Treasury Board committee. Once that happens, he says the details will be outlined in the government’s Main Estimates and Supplementary Estimates.

The government’s detailed spending plans for the year are normally tabled right after the spring budget. Additional spending is submitted to Parliament in the form of supplementary estimates, which are normally tabled about once or twice a year.

Mr. Day also wrote that some material can’t be released “because items that have received cabinet and/or budget approval have not yet been considered by the Treasury Board,” he wrote.

Cabinet decisions and the annual budget outline the broad spending priorities of the government but the Treasury Board cabinet committee and the department itself are responsible for approving the more detailed spending plans of federal departments.

Because of this lack of detail, the Parliamentary Budget Officer’s projections assume government expenses will grow in line with population growth and inflation – equal to about 3.2 per cent on average – over 2010 to 2015-2016.

As a result, Mr. Page projects a federal deficit of $11-billion in 2015-2016. In contrast, Finance Minister Jim Flaherty’s latest fiscal update – released last month – announced the government would erase the deficit that year and post a $2.6-billion surplus.

“The likelihood that the budget will be in a balance or surplus position over the period 2010-11 to 2013-14 is effectively nil and there is a 85 per cent chance (or probability) that the budget will be in deficit in 2015-2016,” Mr. Page writes.

Mr. Page’s report estimates the federal debt will reach $658.1-billion in 2015-2015 (32.4 per cent of gross domestic product) by 2015-2016, which is up from $457.6-billion (29.9 per cent of GDP) in 2007-2008 before the recession hit.

A spokesman for Mr. Flaherty, Chisholm Pothier, said the government stands by its projections. “On savings, we’re confident we’re on track to meet the objectives we’ve laid out,” he said.

Liberal finance critic Scott Brison said he trusts the Parliamentary Budget Officer’s projections over what the Finance Minister says. “We’ve learned not to take Flaherty’s numbers seriously,” he said.


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