Let's show a little fiscal restraint here - Macleans.ca

Let’s show a little fiscal restraint here

Will it be hard to cut $4 billion? Andrew Coyne gives it a try.

Let's show a little restraint here

Dave Chan/Reuters

The first signs of what was to come appeared in the Globe the previous week. “Public sector layoffs may be the tip of the iceberg,” teased the headline, leaving the story to convey the grim news: “The federal government’s bid to curb spending amid a multi-billion-dollar fiscal shortfall has delivered some of its first job casualties of the year.” Brace yourself, it gets worse. “Five curators at the country’s pre-eminent art gallery have been given layoff notices, while about 50 Environment Canada term employees, including scientists and scientific support staff, have been told they’ll no longer have jobs by the end of the month.”

OH MY GOD, they’ve—wait, what? Five curators? Fifty Environment Canada employees? Nobody likes to see anybody lose their job, but how exactly is this evidence of a bid to curb anything? Some perspective: the federal public service, not counting uniformed military or police, employs more than 280,000 people. That’s an increase of about 33,000 since the Tories took power in 2006. Those unfortunate gallery curators and weather forecasters make up about one-sixth of one per cent of the extra employees the government has taken on over the last five years. If this is the “tip of the iceberg,” and if, as every schoolboy knows, four-fifths of an iceberg is below the surface, then we can look forward to reductions in the public service roughly equivalent to about two weeks’ worth of new hires.

Nevertheless, when at last it was “revealed” that the federal government would, as it said it would in its first attempt back in March, and as it repeated it would every day of the election campaign, cut $4 billion out of federal spending by fiscal 2015, well, you could knock us over with a feather. “Budget on the table, public service on the chopping block,” the Globe told readers the next day, while the Star screamed: “Cuts loom as Harper vows to slay deficit.” It would be, the Globe story said, “the most aggressive period of government restraint since the mid-1990s.” Which is fair enough, since it would be the only period of government restraint in that time: since 2000, spending has more than doubled.

Well, unless you count the period of restraint that happened toward the end of last year, when spending mysteriously dropped $4 billion below forecast. That’s right. As recently as the March budget, program spending for fiscal 2011, the year just passed, was projected to come in at $245 billion, yet here we are three months later, and it comes in at “only” $241 billion. So the target to be achieved four years out by the grandly named Strategic and Operating Review might well be achieved by September, for all we know, just through forecast error.

Mind you, you’ve probably heard it more often expressed as $11 billion, as in the government’s planned “$11 billion in cuts.” Eleven billion is what you get if you add up the targeted cuts over four years: $1 billion the first year, $2 billion the second, and $4 billion in each of the third and fourth. But those figures are cumulative: each year’s cut builds on the previous year’s. If you eliminate a program that costs $1 billion in year one, you don’t have to eliminate it again in year two. So adding them together is a little like adding the temperature together on different days (“over the month of February, it was a cumulative 400 below”). Or to put it another way: over those same four years, total program spending before the cuts is projected at $1.022 trillion. After the cuts: $1.011 trillion. Chopping block? More like nail clippers.

Mind you, $4 billion is not nothing. It is more than twice as much, for example, as the savings claimed from four previous Strategic Reviews combined. And to be fair, since the government has declared transfers to provinces and people off limits, the cuts will come out of a much smaller envelope of operating expenses, worth about $80 billion annually. So that means a reduction of about five per cent. Factor in inflation and population growth, and by fiscal 2015 overall program spending will have declined 12 per cent from its 2010 peak.

Well, yes: from its 2010 peak—a year in which spending increased by $37 billion. Never before in our history had spending exceeded $6,200 per capita, in 2010 dollars. In that one magical year, it leapt to $7,200. To be sure, the coming era of austerity will cut it back—to $6,300. But spending will still be nearly 10 per cent higher, after all that heaving and groaning, than it was before the Tories took power.

Will it be hard to cut $4 billion? Here, let me try. We give about $8 billion annually in subsidies to Crown corporations like the CBC, Canada Post, Atomic Energy of Canada Ltd., and Via Rail—it ought to be possible to find a couple of billion there. We hand out another $1.5 billion through just five departments in subsidies to private industry, plus about $700 million through a cluster of regional development agencies: cut those and we’re done.

Too harsh? The federal government will spend nearly $40 billion this year in “other transfers,” that is, neither to provinces nor to people, but to organizations: big businesses, small businesses, native bands, social clubs, in fact just about anything with a business card and a mailing address. Just to list the “grants and contributions” over $100,000 takes up 280 pages in the Public Accounts, in six-point Helvetica.

So cut every tenth grant and we’re done.


Let’s show a little fiscal restraint here

  1. In support of your cause, Mr. Coyne, I’ll be writing my MP to suggest to him that the funding received by Rogers for Macleans’ magazine be cut immediately, and that doing so has the support of one of the primary writers of the magazine.

    I look forward to your column where you laud the government for Wells or yourself being canned.

    However, since my MP is Mr. Obhrai, I expect you have little to worry about.

    • I think that Maclean’s is on record as opposing the grant, so I wouldn’t be worried about anyone being canned.

  2. “OH MY GOD, they’ve—wait, what? Five curators? Fifty Environment Canada employees?”

    It made me laugh.

    Could it be that they are just ‘testing the waters’ to see how the public reacts to layoffs?

    Andrew, I hope you are right, and that they can make the cuts and more.

  3. Andrew, I have one question, though.

    You make it seem easy to cut the required amount. (and I agree) During the election, however, all we heard about was how impossible it would be to find these savings. Why was it reported that way?

  4. I’m sure none of you actually believe any of this.

  5. I agree with Thwim.  Andrew you have appraoched the deficit reduction problem with all the thoughtfullness of a rooky accountant with a brand new spreadsheet.  Your message seems to be all about the numbers with no thought for ANY impact on Canadians.  Surely the point about the “tip of the iceberg” made in previous media articles was about the obvious ideological focus of the cuts, not the overall numbers; as in “get rid of those scientists who support decisions based on facts and those artsy types”.  That message made the right wing folks at the CPC conference this past weekend smile with contentment; but it solidifies Jack Layton’s hold on Quebec.  These are the issues that should be the focus of your article, not some lame accounting exercise. 

    • You’re really calling the federal budget process a “lame accounting exercise”? It must be nice to be so incredibly rich that budgeting is not necessary. Most people, and this includes corporations, and governments, need to live within their means. I’m glad our government is trying to do so.

      • I think Sunshine_Coaster is actually calling Andrew’s article a “lame accounting exercise”.

      • You have no idea whether I am incredibly rich or impoverished; nice try at inventing a straw man to blow down.  It was you who said the federal budget process is a “lame accounting excercise”, not me, but I think that was basically what Andrew said we can expect from this government.  My contention is that the federal budget exercise should be much more than an accounting exercise in that it should involve thinking about which cuts will have either a positive or negative impact on the country and the degree of that impact.  Andrew’s article is devoid of any such thought about consequences, good or bad, or for that matter even the need for cuts to the deficit and so was your comment. 

        If you feel strongly about the need to make cuts to government spending, go ahead and make the case for that position, plus which ones and how much.  I have income enough to pay taxes and think that raising those taxes should also be part of the consideration for balancing the country’s books.  One of the primary reasons that Canada’s deficit is large is because the government purposely reduced their own “means”, probably so that they could justify program cuts later using reducing the deficit as cover.  But it seems neither Andrew nor you are willing to even discuss that issue. 

        The Harper government has successfully refused to substantially debate policy issues, preferring instead to vilify those who seek substantial debate.  Your comment seems to follow Harper’s tactics. 

        • Sunshine, you should see if Revenue Canada will let you pay more taxes, or send a cheque directly to a local University, food bank, etc.

          Spend more time worrying about what you want to do with your money, and less time worrying about what to do with your fellow citizens’ money

          • Why should Sunshine give up her/his right to a say in the public policy of our country?  It might be one man’s decision, and you seem okay with that, but it isn’t one man’s right to an opinion.

        • THIS is one of the truest statements of Canadian politics today. In terms of the our country’s budget, it’s more than just the simple numbers, eh? The values that we express through public support represent more than just accounting scores.

    • Let Jack keep Quebec. The Conservatives will take the rest.

      • It would seem that Harper has assigned you the national unity file, plus made you responsible for strategy for the next election.  You would be advised to give him notice of your plans, because he is currenlty going in exactly the opposite direction. 

  6. what pol will say ‘no’ to a voting block?


    hide your wallets: these liars have got their gov’t cheques for life. Don’t you?

  7. If the Conservatives have, as you say, added more that 4$ billion in expenditures since they slid into power in 2006, perhaps they could just cut the 11$ billion from the spending they have added to public purse, as a gesture of good faith, you understand.  

  8. I like the way you changed  “Environment Canada term employees, including scientists and scientific support staff” to “weather forecasters”.  (yes, that was sarcastic)   Given that, despite what you may want to believe, global warming is real and is a major problem (if you care about the future of the planet) environmental scientists are the last people you should be laying off.

    • Yes, lets keep the environmental scientists who don’t know what they are talking about and have convinced people that global warming is occurring, when it isn’t, and that CO2 is a pollutant when in fact it is air we breathe. 

      Q: Do you agree that from 1995 to the present there has been no statistically-significant global warming

      A: Yes, but only just.

      • You sure were selective with your quotes. I guess you didn’t expect anyone to actually follow the link and find out it also contained this:

        Q – How confident are you that warming has taken place and that humans are mainly responsible?

        A – I’m 100% confident that the climate has warmed. As to the second question, I would go along with IPCC Chapter 9 – there’s evidence that most of the warming since the 1950s is due to human activity.

        Interesting reading.

        • I can be even more selective than Tony!!

          Q – Do you agree that from January 2002 to the present there has been statistically significant global cooling?

          A – The trend this time is negative (-0.12C per decade)

          • Indeed, anymore selective and you would be piecing together new words from the individual letters.

            Not that any of it matters, fossil fuels are king and they will remain so until we run out of them. China and India are building coal plants at a rate of one a week. If the climate scientists are right, the future is going to be interesting for those who are here for it.

            Arguing on a MacLeans forum won’t make a whit of difference.

          • Wow one a week?

            Maybe instead of coal they could burn something that makes giant clouds of ash to block out the sun and lower temperatures, just like the volcanic eruptions did during the years we had lower average global temperatures.

    • Knock it off. When you can tell us that you have a way of moving the economy from one based on fossil fuels to a green economy then we can believe there is an answer to global warming without bankrupting the country and the middle class. Tell me what are the technologies available today that will allow that transition and don’t talk to me about solar panels, windmills and electric cars.

  9. I suspect a slew of useless, parasitic, social engineering NGOs will be cut off from funding, and then we’ll hear the screaming from the Left about the destruction of all those guilt-trip, bleeding heart, feminist scams that do little to no work of value to the beleaguered Canadian taxpayer.

    • I agree. I am sure regular folks could look at the budget and not have any problem finding lots of savings.

  10. Maybe the CBC can cut one of the contributors to the At Issue panel…

    • Haha maybe, but then I wouldn’t want to watch it.

  11. But, could there be an any more perfect scenario than this for the Harper gov. to finally get rid of all those troublesome civil servants who persist in pointing out the inconsistencies in the policies and actions of said government?

    • The sooner they start the better. There are far too many civil servants and politicians living high off the hog while we the taxpayers are fighting for every dollar we can find. Perhaps we could start with all the perks i.e. limousines and drivers, fat pensions, free haircuts, gym facilities and the many other perks that are available that the public doesn’t know about.

  12. Surely it should be easy. Just cancel the 33,000 public servants hired since the Conservatives have been at the reins.  Moreover, I would start with the scads of politicos in the PMO and the PTO, then trash the whole Senate and while we are at it, boost the representation by MPs and thereby reduce the number of MPs per !000 population.  Today’s news about non-approved party expenditures in teh PMO (from the public trough) sickens me.