“They’ve always had to put water in their wine as a result of being in a minority. … They no longer have that excuse to fall back on,” he stated.
“This will be really the first budget for which they will be fully answerable to the population,” Mr. Crowley, who helms the Macdonald-Laurier Institute, added.
Speaking to reporters March 22, Finance Minister Jim Flaherty (Whitby-Oshawa, Ont.) said that the billions of dollars of cuts to public services expected in the budget will be “moderate” but didn’t give details.
The government has been looking for at least $4-billion to $8-billion in annual cuts to federal departments, for a total of five to 10 per cent of their operating budgets. The goal is to balance the government’s books by 2015-2016 after years of deficit.
In a report released March 21, TD Economics predicted that the deficit will come in at $26-billion for 2011-2012, which is almost $5-billion less than predicted in the government’s fall economic update.
The update estimates that taking the strategic and operative review into account, the government will return to surplus in 2014-2015, and have $10-billion in the coffers in 2016-2017.
Mr. Flaherty said that budget would return to balance in the “medium-term.”
Mr. Crowley noted that the government has excluded transfers to people or provinces from their spending review, giving the government “a relatively small sandbox to play in.”
Predictions and government signals on the severity of the cuts have varied widely in recent weeks, with some putting the severity of the cuts at even more than 10 per cent.
“I think people are over-estimating the size of what’s going to happen. I also think that a lot of the reforms are going to involve relatively small incremental changes that have a long-term effect,” said Mr. Crowley
“The sense I get from people in the government is that they’re pretty committed to OAS/GIS reform. The sense I got is they were going to do the very best they could to get this in the budget and defend it,” Mr. Crowley stated.
Prime Minister Stephen Harper (Calgary Southwest, Alta.) and Mr. Flaherty have indicated that the government is looking at reforming Canada’s Old Age Security system, which the Conservatives have argued is unsustainable in its current state. Reforms include the possibility of raising the age of eligibility to 67, from 65. The government has indicated that any changes would be phased in over years or decades.
OAS reform, as well as a decision to move federal-provincial health funding transfers to a per-capita based system after the current agreement expires in 2014, are two examples of current decisions with implications in the long-term, noted Mr. Crowley.
“What they’ll do is they’ll send the long-term fiscal position of Canada off on a different trajectory,” he said.
University of Manitoba professor emeritus Paul Thomas said that he thinks the outcry against changes to OAS may have “scared off” the government for now, and that they may instead test the waters first with a discussion paper.
TD Bank predicted that the current state of Canada’s finances gives the government some extra “wiggle room” and could alleviate the need for more harsh austerity measures.
Last week, Mr. Flaherty said that those focusing on the government’s program of cuts would miss the bigger budget picture.
It’s “about long-term sustainability for jobs, growth and prosperity, looking at retirement income, making sure our social programs are sustainable in the long-term for Canada,” he said.
But the lack of information and consultation in the lead-up to the budget has alarmed public servants. Mr. Flaherty has said recently not to expect the details of exactly what is cut to appear in the budget.
Treasury Board President Tony Clement (Parry Sound-Muskoka, Ont.) told the House of Commons Government Operations Committee on March 14 that the details will be in acts introduced in the spring and fall to implement budget measures, as well as departmental spending requests tabled later in the year.
“Our commitment to you is when we have detailed information that is accurate, we will, of course, post that in the normal course,” he said.
The Public Service Alliance of Canada, which represents almost 175,000 public servants nation wide held a press conference March 21 to denounce the upcoming cuts.
“We’re also here to tell the government to end the secrecy and the mixed messages,” said John Gordon, PSAC president.
Mr. Gordon said he expects the cuts will be closer to 10 per cent, and he said that he thinks that Canadians will learn of what was cut only when they try to access programs or services that have disappeared.
Service Canada worker Heather Millar, a member of PSAC who works on processing Old Age Security applications, said that attrition and a hiring freeze has hollowed out her department and contributed to lengthy wait times for government assistance.
“Am I worried about what this government’s austerity plan may mean for me and my colleagues? Of course, but I’m also very worried about what the cuts to the work I do for the Old Age Security program would mean for the people I serve,” she said.
She and other public servants at the event said they and their colleagues are at a loss for information on where their departments and the programs they provide will be cut.
Merv Wiseman, a member of the Canadian Coast Guard for 35 years and PSAC member, said that two Coast Guard employees have been fired for speaking out against the cuts publicly, and that he himself was currently under investigation by the department. He said he was being pressured to stop talking about the cuts.
“We have this process here that is just absolutely untoward and covert,” he said.
A spokesperson for Mr. Clement said that PSAC’s stance against the cuts is predictable.
“It’s not surprising that self-interested union bosses would launch another salvo calling [for] more spending, higher taxes and big, wasteful government,” said Sean Osmar.
Liberal finance critic Scott Brison (Kings-Hants, N.S.) said that the government has been preparing the public for “significant cuts.” He said he is worried for government science and research programs.
Peter Julian (Burnaby-New Westminster, B.C.), finance critic for the New Democrats, echoed economists’ warnings that austerity measures that cut too deeply could result in further harm to Canada’s fragile economy.
“We’ve been hurt over the last few months with economic slowdown,” he said, noting that 3,000 jobs were lost in February and 40,000 unemployed Canadians stopped looking for jobs that month.
Mr. Brison stated that Canada’s economic recovery has centred on oil and gas in two provinces, Alberta and Saskatchewan. He said a harsh federal budget had the potential to harm vulnerable provinces like Ontario, Quebec and the Maritimes.
The budget comes out March 29, two days before the start of the fiscal year. Mr. Julian said he hopes the reason it is coming out so late is because the government has given it some “sober second thought.”
TD Bank revised its predictions for growth in Canada’s GDP upward last week, from 1.7 per cent to 2.2 per cent in 2012. In light of better economic numbers, the government could have done some last-minute tweaking to the budget and austerity measures, noted Mr. Thomas.
But he also noted that the machinery of government “has a life of it’s own.”
“It’s hard for that giant supertanker of official Ottawa to change course,” he said.
Decisions on the strategic and operating review were the responsibility of a Cabinet sub-committee led by Mr. Clement, and filled out by seven Cabinet ministers and Conservative MP Laurie Hawn, who has reportedly been tasked with liaising with caucus.
Under program review in the mid-1990s, led by then-finance minister Paul Martin, decisions were also made by a Cabinet sub-committee. A Caucus Committee on Expenditure Review and an Expenditure Review Secretariat in Treasury Board were also involved.
“I don’t see this process as being as lucid and as powerful as the one that we used in the mid-1990s,” said Mr. Crowley, who said the decision to exempt transfers from cuts was “a mistake.”
Currently, PSAC and the NDP have called for the exemption of Veterans Affairs from austerity.
Signals suggest that the CBC will face harsh cuts, as well as the Atlantic Canada Opportunities Agency, said Mr. Thomas.
ACOA and the four other federal regional economic development agencies are vulnerable, said Mr. Crowley. He added that the Prime Minister and the Finance Minister don’t like them.
In total, federal economic development agencies spent $1.4-billion in 2010-2011 and employed the equivalent of 1,518 full-time workers.
Mr. Thomas explained that the regional agencies could be seen as treading on provincial jurisdiction, going against the PM’s philosophy of open federalism.
“I think he could make the argument that provincial growth is a matter for provincial governments to take care of, and we’ll create a favourable tax climate,” he said.
Mr. Crowley said that the “evidence is thin” that development agencies actually promote economic growth in the regions.
“If they decided to go after regional development agencies, I think there’s a good case for it. Politically, they’ll have to take the heat for it, but I think they can make a good case that it’s not been money well spent,” he said.
Mr. Julian said that the regional agencies have a role to play in Canada’s economic recovery, and it “doesn’t make sense” to cut them while trying to spur job creation.
He also noted that Canada was ranked 131st worldwide for economic growth by the IMF in 2011, and is projected to fall to 152nd this year.
Mr. Crowley said that the Conservative government’s spending record has been worse than recent Liberal governments, even prior to the introduction of stimulus spending in 2009.
Larry Rousseau, regional vice-president of PSAC for the National Capital Region, noted that it is the Conservatives’ high-level of spending that has put Canada into deficit.
“First you create the crisis, then you solve the crisis by throwing out public services and bringing in private corporately-delivered, for-profit services. Welcome to the new reality,” he said.
Original Article
Source: hill times
Author: JESSICA BRUNO
No comments:
Post a Comment