Flaherty explains that extra $11 billion

As Aaron point out, the Conservative platform released today contains $1 billion in the first year, rising to $4 billion in the third and fourth years, that weren’t in the budget only 17 days ago. That’s a cumulative $11 billion in extra fiscal room to pay for all the Conservatives’ promises. It turns out that money comes from a “comprehensive Strategic and Operating Review.” That review was mentioned in the budget, but Jim Flaherty didn’t book a dime of savings from it because the review hasn’t been done yet.

Now it’s the basis for all new promised Conservative spending. Now here’s the thing: the Conservatives have already undergone a strategic review, and the results are included in the pre-election budget. This is money the Conservatives have already decided to cut. The savings come to $194.5 million for 2011-12, $796.4 million for 2012-13, and $1.57 billion for 2013-2014. (Most of those savings come from slowing growth in military spending, $525 million below the original budget in 2012-13 and 1 billion in the year after.)

So that means the Conservatives have already cut about $200 million this year, $270 million next year and $570 million the year after, using techniques that they hope will land them up to seven times as much savings in a year, not far down the road.

Wow. What have they been cutting?

I couldn’t get any explanation for that at the budget lockup. The descriptions of the cuts in the budget are perfectly opaque — $14 million at the Atlantic Canada Opportunities Agency for “Improving use of internal resources,” $16 million at Quebec Economic Development for “aligning funding with program demand,” and a whopping $190 million at Human Resources for “Improving alignment of program funding with actual needs.”

When I went to the civil servants who were locked in with reporters and copies of the budget to ask, they had no explanation for any of these cuts. “The departments have been informed of the results of the strategic review today,” one official told me. “You’ll have to ask them.”

And then the government fell, and now the departments can’t talk, and the Conservatives tell us they can find $11 billion in savings just like the couple of billion they just found.

Suddenly I needed a much better explanation for the cuts they’ve already announced. The Conservative war room put Jim Flaherty on the phone. Here’s our entire conversation. I informed Flaherty’s press secretary that I would be posting this interview online. It lasts about 10 minutes.

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