A recent report by Parliament’s spending watchdog examines the cumulative impact of the spending cuts that departments are facing, showing the magnitude of the reductions announced in the 2012 budget are about the same size of those that departments are still wrestling to absorb from two previous budgets.
It’s unclear whether the spate of job losses announced in the past several weeks come from the reductions in the 2012 budget or from previous rounds of spending cuts. Departments, however, have to shed $5.5 billion this year and two-thirds of those cuts were announced in the 2010 and 2011 budget.
Departments have sent thousands of notices to public servants since the budget alerting them their jobs are being affected by reductions. The most recent came Tuesday when the National Research Council told staff that it was winding down research operations that would affect 54 employees in Winnipeg and Calgary, most of whom would be laid off by the summer.
The Conservatives have turned to the same pot of money — direct program spending — for three major rounds of spending cuts, which the Parliamentary Budget Office report says will total about $37 billion over five years.
The 2010 budget introduced reductions totalling $15 billion over five years, followed by about another $2 billion over five years in the 2011 budget and finally this year’s is aiming for $20 billion also over five years. But it doesn’t stop there.
After those cuts are absorbed, the government is counting on $10 billion in ongoing yearly savings from departments.
Reductions of that scale raise questions about the impact on employment, the capacity of the public service and services to Canadians. The budget estimated that 19,200 jobs would disappear as departments implemented the $5.2-billion spending cuts.
Parliamentary Budget Officer Kevin Page is trying to get a handle on these issues and last week asked all departments for details on the nature of the savings they intend to book.
He sent letters asking for a breakdown of savings that will come from efficiencies, reducing or eliminating programs and shedding jobs or assets. He also asked for a tally of any investments departments would have to make to achieve the savings they have to deliver.
The government has downplayed the cuts as modest and nothing on the scale of the Liberals’ historic downsizing in the 1990s that wiped more than 45,000 jobs off payroll. It suggested the cuts would be relatively painless for public servants, most of which can be handled by attrition. It claimed most Canadians wouldn’t even feel the cuts because 70 per cent of them are coming from operations and “back office” rather than the front-line workers.
Unions have argued from the start that Canadians should be braced for more than the 19,200 job losses announced in the last budget. They have relentlessly criticized the government for keeping Canadians in the dark about what is being cut. They accuse the government of downplaying the impact, arguing that spending cuts on this scale will erode the capacity of the public service, whether in research, oversight or policy, and eventually eat away at services to Canadians.
A study by the Canadian Centre for Policy Alternatives, partly funded by unions, estimated job losses could be closer to 35,000 as departments absorb reductions from strategic reviews and the 2010 freeze that was imposed on all departments’ operating budgets. That means departments have to handle any increases on wages, travel, contracts, leases, utilities, supplies or purchasing.
The big cuts from the 2010 budget include a major clampdown on spending at National Defence, which includes $500 million this year and $1 billion next year. Those reductions are being felt now with the recent job losses across the country from military bases to reserve sites. On top of that, Defence faced more cuts in the 2012 budget.
The other big item was the “international spending envelope” that is ramping up from $439-million savings last year to $1.3 billion next year. These reductions largely come from money earmarked for assistance. It too faced more cuts in the budget.
The last time the PBO tried to get a handle on the impact of cuts was following the 2010 spending freeze, but it was blocked from getting information because of cabinet secrecy. At the time, the Commons government operations committee concluded it didn’t have the information it needed to hold the government to account and recommended that Treasury Board and Privy Council Office share information with Page’s office under a “service agreement” so he could do his work for Parliament while respecting cabinet confidentiality.
Peter Devries, a consultant in fiscal policy and public management, said Canada isn’t facing a fiscal crisis and the latest round of cuts was aimed at shrinking the size of government and “placating Conservative supporters.”
Other than cuts at defence and international assistance envelope, the savings in the 2011 and 2012 budget are largely supposed to come from ill-defined “efficiencies” by “streamlining, standardizing and consolidating and automating administrative functions.
“How often can the government go to the efficiency well before the government discovers it has run dry,” said Devries.
“It is simply unrealistic to believe that $5.2 billion in annual savings can be found without cutting programs and services, The fact is that after almost nine months of reviewing spending the government knows exactly what programs and services will be affected. It simply doesn’t want to tell Canadians.”
Meanwhile a spokesman for Treasury Board President Tony Clement said the government is reducing the deficit using fair, balanced and moderate savings measures” that will reduce the size of the public service by four per cent over three years.
“Our government is focused on reducing the waste in government spending for the benefit of all Canadians. We are committed to creating jobs, strenghtening the economy and ensuring long term propserity for the programs and services that Canadians value today and tomorrow,” said Jennifer Geary.
Original Article
Source: ottawa citizen
Author: KATHRYN MAY
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