Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Monday, March 12, 2012

Don’t expect federal spending to increase from projected $252-billion: PBO

The federal government’s spending estimates, recently released for the upcoming 2012-2013 budget year, project cuts to several departments even without including the coming billions of dollars in strategic operating review cuts, and the Parliamentary Budget Office says don’t expect public spending to increase from what departments have projected in their $251.9-billion main estimates.

Carleton University public administration professor Robert Shepherd said, however, that it’s unlikely, even with the strategic and operating review, that departments won’t be asking for more money in supplementary estimates.

“I can’t imagine going through a fiscal year without any supplementary requests,” he said.

“There’s always cost over-runs. You can’t reasonably estimate everything,” he added.

University of Victoria public administration professor David Good, a former assistant deputy minister with experience in the Treasury Board, said that while the main estimates wouldn’t contain any hints about the federal government’s strategic operating review, the funding level could be viewed as a baseline for the upcoming cuts.

“I assume what it will look like, when the sups are tabled, it will show reductions in them,” he said. He added that while some departments may post decreases in funding, it will likely be offset by increases in portfolios that are government priorities.

Prof. Shepherd said to expect cuts to “soft programs” in departments like Human Resources, International Co-operation and Foreign Affairs, as well as Heritage and the Canada School of Public Service.

Increases will likely come in the government’s stated areas of priority, such as justice and security, and infrastructure, he said.

The main estimates are $7.7-billion lower compared to last year’s total estimates. The total estimates for last year were $259.6-billion, while this year’s main estimates are $251.9-billion. Like every year, departments will still have the opportunity to ask for additional funding in supplementary estimates, which come out in late spring, November and February.

Unlike most years, the government will be implementing the strategic and operating review in 2012-13, which could mean that many departments may see their spending authority revised downwards in the supplementary estimates.

According to the Parliamentary Budget Office, last year’s supplementary estimates were equivalent to three per cent of the main spending estimates.

“This figure will likely be lower this year, owing to potential reductions arising from the strategic and operating review,” the PBO stated in a report released March 9 on the main estimates.

The government has been working on ways to cut the public service by at least five to 10 per cent, or $4-billion to $8-billion over the next four years, through the strategic and operating review. The highly-anticipated results will be in the budget, which Finance Minister Jim Flaherty (Whitby-Oshawa, Ont.) will present in the House on March 29.

The government has been clear that none of the results of the strategic and operating review are in the main estimates.

Compared to the 2011-2012 main estimates, the 2012-2013 number is actually up by $1.1-billion, from $250.7-billion and $251.9-billion. The PBO also pointed out that the number is 10 per cent higher compared to the 2008-2009 total estimates, which was pre-stimulus plan. That year the total estimates were about $231-billion.

In total, the 2012-2013 main estimates  include $251.0-billion in spending for more than 130 organizations. Spending authority spans the fiscal year, from April 1, 2012 to March 21, 2013. Of that, $91.9-billion needs to get approval from Parliament. The remaining $160-billion is statutory funding, which is mandated by legislation.

A number of statutory programs, such as Old Age Security and Canada Health Transfers to provinces, which increase by six per cent each year, have contributed to the increase, Bill Matthews, assistant secretary in Treasury Board Secretariat’s expenditure management sector, told the Senate National Finance Committee last week.

Forecast OAS spending is up by $1.8-billion compared to 2011-2012, a 2.2 per cent increase. In 2012-13, OAS spending is projected to be more than $30-billion. In 2011-2012, that figure was about $29-billion. Mr. Matthews said that this was because of quarterly adjustments for inflation as well as adjustments in the projection of the number of people who will be eligible for the program.

The government is expected to change the eligibility age for OAS from 65 to 67 in the budget, and any financial implications of that decision are not factored into the current numbers.

As a portion of estimates spending in 2012-13, 61 per cent of funding will go to transfers, and major transfers to individuals are up from last year.  Payments to the public debt take up 12 per cent of spending, and the government’s operating and capital expenses are 27 per cent of spending, which is down slightly, Mr. Matthews said. It was the government’s operating expenses that were scrutinized for efficiencies under the SOR.

One reason many departments are posting decreases in their main estimates is because they are transferring a portion of their IT budgets to Shared Services Canada, noted the PBO report. Created last August and tasked with creating a single hub for much of the government’s IT needs, people and money have slowly been migrating to SSC’s control. One of the biggest transfers was from the RCMP, which sent $143-million to SSC.

Shared Services Canada spent about $640-million last year, and is requesting authority to spend $1.5-billion in 2012-13. This is the department’s first time in the main estimates.

The department posting the largest decrease compared to the total estimates last year is National Defence. DND is currently posting a $1.6-billion decrease in their main estimates compared to last year, from $21.8-billion to $21.2-billion. Aside from a $305.7-million transfer to Shared Services Canada, the 2012-13 main estimates also include the break-off of the Communications Security Establishment Internal Services Unit. This represents a $388.6-million decrease in the budget.

The department is also listing a $957.1-million decrease in operating costs, a $560-million decrease in capital costs and savings of $525-million because of efficiencies found in the 2007 budget.

Mr. Matthews also pointed out that one of the reasons for this is the department didn’t get a request for funding for its training mission in Afghanistan in time to be included in the main estimates. The department is expected to come forward for the funds in a future supplementary estimate.

Despite the decreases, the department is still getting $333.6-million as a part of the annual defence escalator.

The strategic review—a savings exercise that required departments to identify their lower-priority or under-performing programs for five per cent in savings—is also still being felt by departments who underwent the exercise more recently, noted Conservative MP Mike Wallace (Burlington, Ont.).

For instance, Fisheries and Oceans, which underwent strategic review in 2010, is posting a decrease of $18.9-million because of the exercise.

The government’s spending on public servants is also declining  in the main estimates. The PBO expects spending on personnel to decrease by four per cent, or $1.6-billion, in 2012-13 compared to 2011-12, from $39.1-billion to $37.5-billion. This doesn’t factor in the expected loss of thousands of public service jobs coming from the aftermath of the SOR.

Even in the current fiscal year, 2011-2012, anecdotal evidence seems to suggest that departments have been holding back on hiring.

Prof. Shepherd said he’s also noticed a hiring slowdown.

“Even being in the school here, I’m hearing from just students who are saying until people hear what’s going on in the budget, they’re not even willing to commit to co-op jobs,” he said.

“If they’re thinking that closely about $5,000 for a co-op student, they must be thinking on much bigger terms for permanent employees,” he said.

Prof. Good noted that departments are unsure of how many people they will have to let go because of the SOR, so they would want to be prudent in taking any new employees on.

“I think you’re going to want to be careful because you will be making further reductions beginning April 1,” he said.

Original Article
Source: hill times
Author: JESSICA BRUNO 

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