“They’re trying to deal with this problem by nickel and diming certain areas of government to which they are ideologically opposed,” Liberal MP Ralph Goodale (Wascana, Sask.), a former finance minister told The Hill Times last week, noting the government’s is cutting Environment Canada and going after the CBC. Mr. Goodale said if the government wants to curb its spending problem it has to rethink its “ideological pet projects” worth billions of dollars.
“They’re cutting 150 agricultural food inspectors, they’re eliminating or downsizing the rescue centre in Atlantic Canada, cutting back on ACOA, and Fisheries and Oceans and so forth … all of the things that they’re ideologically opposed [to],” Mr. Goodale said.
“They’re going to have to come to another decision about what you do about the fighter jets. The experts say if you put that contract out to tender, you will save 20 to 25 per cent simply by the processes of competition. They’re going to have to make a different decision about jails. Jails is turning out to be their biggest single spending item, at a time when even Newt Gingrich says they’re on the wrong track. It’s those things those multi-billion dollar ideological pet projects that are putting the fiscal security of the country at risk. It’s not a few dozen environmental inspectors.”
In its first year of power, Prime Minister Stephen Harper’s (Calgary Southwest, Alta.) government increased spending by 6.3 per cent and continued increasing until 2010, when it went down by 1.36 per cent. Between 2006 and 2010, government spending increased by $48-billion, according to the Public Accounts of Canada. In its first year the Conservative government had a $13.8-billion surplus, and in 2010 posted a $33.37-billion deficit. In total, revenues during the same period grew only 0.46 per cent.
In comparison, former prime minister Jean Chrétien’s government from 1994 to 2003 increased spending by 9.8 per cent while revenues grew 46.96 per cent. Mr. Chrétien inherited a $37.47-billion deficit when he took power. In 2003, the government posted a $9-billion surplus.
Under Paul Martin, the government increased spending 10.85 per cent in 2004, but decreased it by 0.49 per cent in 2005 while revenues continued to grow.
Mr. Goodale, who served as the finance minister from 2003 to 2006, said the Conservative government’s spending has been “distorted” and “out of all proportion with the economic conditions that now prevail in the world.”
Finance Minister Jim Flaherty (Whitby-Oshawa, Ont.) said last week during Question Period that the government’s economic action plan, which steered Canada through the global recession, was “effective” and criticized the Liberal Party for voting against the most recent budget.
“They voted against flowing $1-billion in federal funding to provinces and territories for infrastructure 2011-12. They voted against helping manufacturers by extending the capital cost allowance for two years. They voted against renewing EI pilot projects to help the unemployed. They voted against extending work sharing and against the hiring credit for more than half a million small businesses in Canada. That is the Liberal record,” Mr. Flaherty said.
In response, Liberal MP Scott Brison (Kings-Hants, N.S.), his party’s finance critic, said that the government has “missed every deficit target they ever set.” The Liberals voted against the budget because the government “thinks it is fair to deny low-income Canadians the same kind of benefits it has offered other Canadians. We will continue to vote against a government with this level of economic incompetence and disinterest in helping working Canadians who need a hand during these difficult times,” he said.
Mr. Flaherty noted, however, that Canada has received top marks from international financial organizations for its handling of the recession. “Not only do we have the view of the IMF that Canada is actually doing quite well, not only do we have Forbes magazine rating our country, Canada, as the best country in the world in which to invest, not only do we have that, but we have the Canadian people who, on May 2, had an opportunity to express their view at the ballot box with respect to the Liberals’ economic policy, and we know the result of that,” Mr. Flaherty said. “They are sitting way down in that corner.”
Mr. Goodale said there’s little comfort in comparing Canada to the rest of the world because many other countries are doing badly.
“You’re comparing yourself to a very low standard and we’re lowering our standard as a result of this and settling for mediocrity. Those spending figures simply show a government that talks the rhetoric but certainly doesn’t walk the walk when it comes to fiscal responsibility,” he said.
“That’s horrendous. In five years time they’ve increased the size of government by one-third. Canadians have every right to say a, that’s wildly irresponsible and b, what have we got for it? We’ve got a standard of living that’s basically flat, we’ve got disposable incomes that are not going up, we’ve got household debt that’s at 151 per cent of disposable income. We’ve got 60 per cent of Canadian families who don’t think they can send their kids to university, we’ve got 70 per cent of Canadians working in the private sector that don’t have a pension. For all this profligacy, Canadians are in a very mediocre situation.”
During debate in the House last week on Bill C-13, the Budget Implementation Bill, Conservative MP Shelly Glover (St. Boniface, Man.), Parliamentary secretary to the Finance Minister, said that Canadians are doing better economically because of the government’s action plan.
“While the government recognizes that there are still too many Canadians looking for work, Canadians are doing relatively well when the difficulties other countries are having are taken into account. We must continue to implement our low-tax plan to protect the economy and create jobs, and this legislation will help us to meet our objectives,” she said. “Our plan has given Canadians more flexibility to improve their quality of life, even when times are tough. It leaves more money where it belongs, which is in the pockets of taxpayers. That is why the keeping Canada’s economy and jobs growing act would provide targeted tax relief where it would be needed most to help Canadians.”
Meanwhile, the government’s specific expenses have all increased over the last five years.
When it comes to the “information” category—which includes expenses for advertising, graphic design, publishing services, public relations and public affairs services, marketing and polling—the Conservative government’s spending increased by 22.18 per cent between 2006 and 2009. In total, the government spent $1.2-billion during those years on “information.” In 2010, the government spent $275-million, a decrease of 20.7 per cent from the previous year.
In the “personnel” category—which includes salaries, car allowances and contributions to employee benefit plans—the government’s spending increased 28.47 per cent between 2006 and 2010. In 2006, the government spent $32.9-billion on personnel and last year, it spent $42.2-billion.
On “professional and special services”—which includes costs for consultants, translators, storage and temporary help among others—the government spent $7.9-billion in 2010. That’s an increase of 17.7 per cent since 2006. The Conservative government spent the most in this category in 2009 when costs totaled $8.1-billion.
Mr. Goodale said that the Conservatives are “champions” when it comes to spending in these areas. “When you added up the size of the cabinet, it’s on a dollar basis the most expensive Cabinet in Canadian history,” he said.
The government is currently going through a strategic and operating review. That review, under the Treasury Board Subcommittee on the Strategic and Operating Cabinet Committee, helmed by Treasury Board President Tony Clement (Parry Sound-Muskoka, Ont.), aims to save at least five per cent, or $4-billion, a year from the civil service’s $80-billion annual operating budget by 2015-16. Operating budgets could also be cut by 10 per cent.
In his latest economic update, Mr. Flaherty said the government will not have a balanced budget by 2014 as it previously predicted. Mr. Flaherty said the government will be out of deficit now by 2015 at the earliest.
Mr. Goodale said that the review imposes “a heck of a lot of pain and loss on a broad cross section of Canadians for relatively little gain” and that it needs to do more to get out of deficit and rein in spending. “Unless they’re prepared to revisit their ideological stubbornness on the jets and jails and some of their corporate preferences, they’re not going to resolve this problem. They’re just whistling past the graveyard and the Parliamentary Budget Officer has told us as much,” he said.
Origin
Source: Hill Times
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