Budget office says Conservative cuts achievable for now, questions longer term

OTTAWA – The Conservative government is asking Canadians to take it on faith that it can cut $5.2 billion a year in federal spending while maintaining the same level of services, says a report from the Parliamentary Budget Office.

The latest report from the independent budget watchdog says federal departments did not provide it with enough information to fully assess whether budget savings proposed in 2012 are achievable.

But the data that was passed along suggests the cuts can be reached in the short term, while long-term sustainability remains unknown.

The report was requested by NDP Leader Tom Mulcair, who wanted it delivered before the House of Commons breaks for the summer recess. The PBO complied Thursday using what data it had.

“Without the requested information, it is difficult for the PBO to estimate the long-term sustainability of the efficiency measures initiated in Budget 2012, which represent the majority of the restraint package,” Sahir Khan, the assistant parliamentary budget officer, said in an email.

“However, the PBO’s analysis suggests that in order to deliver the fiscal savings without negative service-level impacts to Canadians, the government would have to sustain a significant productivity improvement, which would be unprecedented in recent history.”

The report says that over five years the government is claiming it can achieve savings of more than 500 per cent on each dollar of investment — without providing any plan on how it will achieve this return on investment.

“Parliamentarians may wish to solicit further details regarding how this will be accomplished,” the study dryly concludes.

Peggy Nash, the NDP finance critic, said Conservative budget math might be more convincing if the government said the billions in cuts are to be accompanied by commensurate cuts to programs and services.

“The government’s not making that case,” said Nash. “They don’t seem to have the courage of their convictions by standing behind the decisions they’re making.”

Treasury Board President Tony Clement’s office did not respond to a request for comment.

The report comes as the Harper government is under siege on questions of transparency and accountability.

A Senate expense scandal that reaches into the Prime Minister’s Office has consumed Ottawa for weeks.

Edmonton MP Brent Rathgeber quit the Conservative caucus Wednesday night over what he called the “gutting” of his private member’s bill on government salary disclosure, and delivered a scathing exit interview as he departed.

“I have reluctantly come to the inescapable conclusion that the government’s lack of support for my transparency bill is tantamount to a lack of support for transparency and open government generally,” Rathgeber said on his blog.

The PBO’s report only reinforces that perception.

Kevin Page, the previous parliamentary budget officer appointed by Prime Minister Stephen Harper, took the government to court over its refusal to provide him with the data needed to properly assess whether the 2012 budget cuts are achievable.

A Federal Court ultimately dismissed his suit on a technicality in April, while admonishing the government for its refusal to recognize the PBO’s mandate.

“If the majority wants to abolish the position of the parliamentary budget officer, or define his or her mandate somewhat differently, so be it!” wrote Judge Sean Harrington.

“However, it must do so by legislation. Having made that law by statute, it must unmake it by statute. In the meantime, Parliament has no right to ignore its own legislation.”

After the court’s prodding, 60 of 82 federal organizations eventually provided some data to the PBO, although only 14 met the initial May 10 deadline.

“Some provided details regarding cash inflows and outflows,” says the report. “Few provided information regarding service level impacts …”

However, by analysing the government estimates, the PBO determined that three-quarters of programs are predicting unchanged performance, and a fifth predict improved performance.

A third of the planned $5.2 billion in annual savings is pegged to staff reductions and the government appears to be ahead of schedule in chopping the federal workforce, said the report.

Reductions in transfer payments make up 22 per cent of the planned savings, while the remaining 46 per cent is grouped under other operating expenses.