Ottawa

‘We have booked nothing in this year’s budget based on that review because it hasn’t been done yet’

So the Harper government now promises that, if reelected, it will balance the budget in 2014-2015. This promise is based on cuts that were described two weeks ago as hypothetical.

On that note, here is how Finance Minister Jim Flaherty described the “Strategic and Operating Review” when he discussed the budget with reporters shortly before it was tabled on March 22.

We have the freeze on the departmental operating budgets for the next two years.  That was announced last year. That’s not news but we’re maintaining it. But we’re also going ahead with what is quite a significant initiative and that is this Strategic and Operating Review. We’ll look at direct spending and the cost of delivering those services by the federal government. The President of the Treasury Board will be in charge of the special committee that will look at that.  We have booked nothing in this year’s budget based on that review because it hasn’t been done yet.  We’ll let the review happen and then in Budget 2012 we’ll book some savings, I hope. We’ll have some outside experts give advice to the government about how to do this. A great deal of thought and discussion has gone into the creation of the Strategic and Operating Review…

The Strategic Operating Review it’s to accomplish three things. One is it may help us. It may result in the budget being balanced in 2014-15 rather than 2015-16. That could happen. Secondly, it will give us room to pay down public debt because we’re of course accumulating more public debt because of the deficits coming out of the great recession as it’s being called. And, thirdly, it’ll give us an opportunity for more tax reductions. So that’s where the flexibility can come from going forward.  But we don’t need the Strategic and Operating Review to balance in 2015-16.  There are no calculations in the fiscal track based on whatever the results will be of the Strategic and Operating Review.

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