Harper would have to axe programs to reduce deficit

[oneh2obabe]

OTTAWA—A re-elected Conservative government would have to slash social and economic programs and federal government services to meet Stephen Harper’s deficit-reduction targets, analysts say.

Early in the campaign, Harper rewrote the fiscal estimates in the March 22 budget, saying a Tory government would conduct a review to find “efficiency” savings rising to $4 billion annually by 2014. In all, the review would locate $11 billion in savings and allow a Conservative government to eliminate the $40 billion budget deficit a year earlier than planned, Harper said.

While declining to say where the axe would fall, he said curbing Ottawa’s deficit spending could be accomplished with a minimum of pain for Canadians.

“Anybody who says you can’t find money in Ottawa without cutting vital services to people simply is living in a fantasy world,” Harper said.

But analysts say past experience has shown that the Conservatives’ cost-cutting claims are unrealistic and the savings envisioned by Harper would require significant cuts to programs intended to help the public.

“If it is easy now to find $4 billion in annual savings through ‘efficiencies,’ then why didn’t the government start five years ago?” asked Peter Devries, a former senior finance department official, in a recent article entitled “If Pigs Can Fly.”

He added: “Anyone who has actually been involved in controlling and cutting program expenditures will tell you that it is not possible to find savings of that amount through efficiencies. To find credible savings that would generate $4 billion in ongoing savings would require elimination or cuts to existing programs.”

Canadian Labour Congress chief economist Andrew Jackson said the Conservative spending exercise would likely cause cuts in programs because the obvious, easy cuts have already been made by the Harper government.

He said the spending to be reviewed by the Conservatives — $80 billion in annual operational costs — has already been subjected to a round of savings reviews. “It’s a second kick at the can,” he said. “Those budgets have pretty well already been cut.”

In explaining how Ottawa can reduce costs, Harper has mentioned the example of potential savings through a more efficient computer system. But Jackson said it’s widely accepted that upgrading outdated federal government technology can’t be done without hefty initial spending on new equipment — hardly a cost-saving measure.

Successive federal governments have vowed for decades to hack away at federal spending, but, with the exception of the Liberals under then-finance minister Paul Martin in the mid-1990s, the effort has usually produced more talk of restraint than actual restraint.

The Conservatives’ recently announced 2011 strategic and operating review is the latest in an array of cost-cutting initiatives by Harper cabinet ministers. In all, four previous spending restraint exercises have netted $2.8 billion in ongoing savings in Ottawa’s operational costs. That’s on a federal spending envelope totalling $278 billion this year.

BMO Capital Markets deputy chief economist Doug Porter said the Conservative plan would mean a reduction in federal spending of a bit more than one per cent. He said it’s “not impossible” but would be “a very real challenge.”

Even leaving aside the extra cash doled out by the Harper government to combat the recession, total spending under the Conservatives has expanded at a rapid pace in the past five years.

“Government spending has been growing in the neighbourhood of five to six per cent,” so cutting real spending “would apply a pretty marked slowdown” in government stimulus, Porter said.

Canadian Taxpayers Federation director Derek Fildebrandt said Harper’s restraint plan doesn’t mean much without specifics on planned cuts.

“It can certainly be done but we’d like to see the details of how the Conservatives plan to do that,” said Fildebrandt, whose organization says the Harper government has engaged in the largest spending spree since the Trudeau years.

“There’s lots of fat in government and there’s always going to be fat, and the government is going to have trim some meat if its going to get spending under control,” Fildebrandt added. And “meat,” he said, means government programs.

[NAB]

Yes, it really is scary isn't it. In many ways it looks like the "medicine" Liberal PM Paul Martin served up back in the 90's when he set out to balance the budget and get us out of the massive hole Trudeau had plunged us into and that had been hanging over our heads for years because no one wanted to make the tough decisions, including Mulroney. It took Martin around 4 or 5 years to do that, and the pain was substantial. Anyone who lived and worked in BC during the years about 1994 through 2001 will probably be able to tell a horror story or two.

But what choice do we have? We are badly in the hole once more, just for different reasons than Trudeau's. No one saw a global financial meltdown coming. Not Martin, not Harper, not the BC Liberals nor the Ontario Liberals, no one. If any domestic blame is to be placed, it's that we rode an express train to hell in booming times and even more booming expenditures to match from about 2002 to 2007/2008 when the global recession hit, and even then didn't slow down or hit the brakes. Governments everywhere, including our own Campbell led government here in BC, had got caught up in the frenzy of economic growth based on debt and the never never plan, thinking the good times would just keep rolling on so putting nothing aside for a rainy day.

And ya know what? We stupidly did the same thing in our personal lives too. And now the piper has to be paid, no matter who forms the next government.

Edit to add: BTW, we are in an election campaign. None of these guys is going to introduce bad news that may cost votes, at least until its over. To Harper's credit, he comes the closest to warning us by telling us our recovery from recession is very fragile. But we still have lots of folk running around telling us how great we are compared to everyone else - even promising to launch all sorts of new social benefit programs, and we shouldn't worry. Well, I think we damned well better worry, particularly if Ignatieff and Layton are able to follow through with their "promises". But Harper gets criticised for not making any expanded promises to speak of, at least anything of major significance - and even that is dependent he tells us on steady as she goes and finishing the recovery plan first.

Nab

[Urbane]

Yes, it really is scary isn't it. In many ways it looks like the "medicine" Liberal PM Paul Martin served up back in the 90's when he set out to balance the budget and get us out of the massive hole Trudeau had plunged us into and that had been hanging over our heads for years because no one wanted to make the tough decisions, including Mulroney. It took Martin around 4 or 5 years to do that, and the pain was substantial. Anyone who lived and worked in BC during the years about 1994 through 2001 will probably be able to tell a horror story or two.

But what choice do we have? We are badly in the hole once more, just for different reasons than Trudeau's. No one saw a global financial meltdown coming. Not Martin, not Harper, not the BC Liberals nor the Ontario Liberals, no one. If any domestic blame is to be placed, it's that we rode an express train to hell in booming times and even more booming expenditures to match from about 2002 to 2007/2008 when the global recession hit, and even then didn't slow down or hit the brakes. Governments everywhere, including our own Campbell led government here in BC, had got caught up in the frenzy of economic growth based on debt and the never never plan, thinking the good times would just keep rolling on so putting nothing aside for a rainy day.

And ya know what? We stupidly did the same thing in our personal lives too. And now the piper has to be paid, no matter who forms the next government.

Edit to add: BTW, we are in an election campaign. None of these guys is going to introduce bad news that may cost votes, at least until its over. To Harper's credit, he comes the closest to warning us by telling us our recovery from recession is very fragile. But we still have lots of folk running around telling us how great we are compared to everyone else - even promising to launch all sorts of new social benefit programs, and we shouldn't worry. Well, I think we damned well better worry, particularly if Ignatieff and Layton are able to follow through with their "promises". But Harper gets criticised for not making any expanded promises to speak of, at least anything of major significance - and even that is dependent he tells us on steady as she goes and finishing the recovery plan first.
Nab

I'd say that's bang on. Trouble occurs, big economic trouble, when politicians promise big spending programs to get elected. Recently a poll was taken in the US and it was found that a significant percentage of the population thought that the government had lots of money to hand out that didn't come from taxes. They figured there was some big pot full of money somewhere I guess. I have no doubt that a similar poll in Canada would yield similar results. Well, there is no big pot of money and people have to realize that if they want all these programs then taxes need to cover the cost. I'm in favour of looking at which programs we can cut out and axing them. I don't want to see us go further into debt and we have enough wealth distribution aspects to our economy as is. Enough is enough.

[twobits]

Nab, I have to agree with you for the most part. Contrary to the OP articles intent to strike fear into people over a loss of programs and services, I would agree with Harper that it can be done without a lot of pain. The simple truth is we have too many programs and serices that are less than vital or of marginal benefit to a very small segment. There will be squeals from the few that are directly effected but it is funding that should never have happened too begin with. I can think of several examples myself of people (families) that have become acustomed to Gov't cheques via programs and grants as their means of income. It is now their "job". To be clear, I am not speaking of pension or social services. These are not uneducated people, disabled people or otherwise disadvantaged. If anything, I have to give them credit for searching out and finding out how to milk the taxpayer cow. Many in academia are masters at this game. Insert Iggy here. If cut off they would develope their own income stream and the economy would be better off for the effort too.
One concern I do have is a repeat of Martin's slash and burn that was not so much a culling of waste and unneccessary programs but rather a download to provincial budgets for essential service and transfer payment cuts. That download flowed right thru to affect Municipal balance sheets. The end result, federal budget surplus at the expense of provincial budgets and higher property taxes for everyone. I call that a shell game.

[NAB]

If Harper feels he can deliver a full economic recovery and a balanced budget over however many years without raising taxes or causing us too much pain in the process (although there obviously will need to be some), just by asking us to be patient, stay the course, don't do anything stupid or shift to another party peddling an unknown agenda, and get our own houses in order to boot, then I say "let's go fer it"! He's not lying to us IMO, he's telling it like it is, and not promising to give us things that cannot be afforded, at least without hampering our progress out of deficit.

Much preferabe IMO to slash and burn as the "ex-spurts" fearmonger. Of course it is not as though those "ex-spurts" have had or do have a particularly accurate handle on their forecasts either. Never have.

Noted on the other side... Iggy rants about "democracy", yet is prepared to usurp it by trying to take power without going to the people in an election. Some democrat LOL. But he uses the excuse that our constitution and parliamentary rules allows that (open for debate that one), but even then just because you "can" do something, doesn't mean you "should", or even that it meets the test of being "democratic". ...hypocrite :-(

And even if he gets to re-jig the budget, I notice that he "says" he can do his budget without raising taxes either (not so Layton it appears).... but he and his henchmen have stated that only a Liberal Government can get us out of the hole. After all, they have experience in doing that as they did it before and got us into fiscal "surplus". Ya, many of us lived through that through the 90's and beyond, and it wasn't pretty, as discussed in this and another thread. Paul Martin did that to us as Finance Minister and eventually PM. He eventually had PO'd so many people that he got his butt kicked out on the street.

Noted too, Iggy says he can do it without raising taxes, but he has been remarkably quiet as to what he would slash and burn to accomplish that, as well as pay for all his expensive new promises. At least with Layton he makes it rather clear where the extra money he would spend on his pet projects will come from - higher, much higher, taxes in one form or another, and at the end of the day out of the pockets of just about everyone.

Nab

[grammafreddy]

I agree, Nab and Urbane. There's gonna be a small amount of pain for some agencies, NFPs and ministries but I can see where there's a lot of overlap across federal ministries and there's some amalgamation of services/bureaucrats/staff that can be done. There's NPOs that get multiple operating grants from multiple ministries at every government level and all that could change. There's also some NPOs that duplicate services and those could change and become more efficient.

I remember all too well Paul Martin's "balancing the books" and how sleazily it was done and what the results were for the provinces and municipalities. Sure, he came up with a surplus ... but everyone down the chain took on his cuts without the funding they had started with.

I can think of funding that is not essential funding and some of that could sure get trimmed or deleted entirely. Some things that provinces and municipalities fund don't need to pull from the federal trough, as well ... it's time for looking at priorities, who/what really needs the bucks and who/what is fluffy stuff right now.

[NAB]

That reminds me of the private sector books, classified ad's, CD's, and web sites that presume to tell us how we can (for the price of their product or "service" of course), tap in to all the various government agencies and related grants associated with them gramma. Big business that, and someone has to get that crap under control.

Some (many?) present themselves as "consultants" of one form or another, and are themselves operating on government handouts. Let 'em go get a "real" job LOL.

Nab

[grammafreddy]

That reminds me of the private sector books, classified ad's, CD's, and web sites that presume to tell us how we can (for the price of their product or "service" of course), tap in to all the various government agencies and related grants associated with them gramma. Big business that, and someone has to get that crap under control.

Some (many?) present themselves as "consultants" of one form or another, and are themselves operating on government handouts. Let 'em go get a "real" job LOL.

Nab

LOL _ Ain't that just the truth. For instance (and just for starters) ... service to the unemployed just here in town ... there's the government paid consulting company who does the Targeted Wage Subsidy, the government paid consulting company who does the resume and job hunting training, the government paid consulting company who runs the Resource Centres, employment training and staff at the YM/YWCA, People in Motion, the EI office itself downtown ... all from the taxpayers' pockets and all with their own staff, office expenses and management.

[nolanrh]

LOL _ Ain't that just the truth. For instance (and just for starters) ... service to the unemployed just here in town ... there's the government paid consulting company who does the Targeted Wage Subsidy, the government paid consulting company who does the resume and job hunting training, the government paid consulting company who runs the Resource Centres, employment training and staff at the YM/YWCA, People in Motion, the EI office itself downtown ... all from the taxpayers' pockets and all with their own staff, office expenses and management.

Out of curiosity, what criteria are you using to evaluate programs for cuts?

[NAB]

The funny thing about these "analysts" who are projecting slash and burn if Harper is to meet his new deficit projection targets, is that they must be Liberal supporters LOL. Three things they apparently don't talk about when embarking on such unwarranted fear mongering are...

1. Acknowledging that we are already (and surprisingly) well ahead of even Harper and Flaherty's (even the Bank of Canada's) most optimistic targets.

2. Not telling us just how Ignatieff and/or Layton are going to live up to all their additional massive program spending promises on top of existing program spending, without slashing and burning somewhere - much like Paul Martin did (or Christy Clark will have to).

3. Failing to consider and acknowledge that there is a huge difference between slash and burn and axing programs, and simply seeking a little more restraint and implementing careful management over INCREASING program spending over three years to achieve a slightly faster pace of recovery. The Conservative set the bar a little higher.. so what if we miss it and only hit nthe original 4 year plan instead of the new three year one so the purse strings can be loosened a year earlier?

Three strikes without connecting with the ball and you are usually "OUT''. Ignatieff and his partisan "analysts", in spite of his evangelical "Rise Up" proclamations that he has been connecting the dots, ...seems to be dealing more with trying to connect the spaces in his new incarnation.

Nab

[twobits]

LOL _ Ain't that just the truth. For instance (and just for starters) ... service to the unemployed just here in town ... there's the government paid consulting company who does the Targeted Wage Subsidy, the government paid consulting company who does the resume and job hunting training, the government paid consulting company who runs the Resource Centres, employment training and staff at the YM/YWCA, People in Motion, the EI office itself downtown ... all from the taxpayers' pockets and all with their own staff, office expenses and management.

Out of curiosity, what criteria are you using to evaluate programs for cuts?

Criteria? How bout is there redundant overlap as GF points out? Or how bout is there a benefit to society in general? Do things like 85k to study the life cycle of the Fruit Bat or 60k to examine the food preferences of the Spotted Salamander sound hugely important to society in general or rather a firm grasp of the public teat by professional academics?

One other pet peeve I have that tends to be a bit of a sensitive topic are student loans. Not that we shouldn't have them but should there not be some evaluation of the prospect of employment in the field of study we are guaranteeing a loan payment for. Just why are we cranking out Art History, poly science, philosophy, etc majors to work at Wallmart and have a significant percentage default. Banks scrutinize what kind of car you want to borrow money for to provide some measure of recouping the loan but you can borrow money to buy any kind of education you take a fancy to.

[grammafreddy]

LOL _ Ain't that just the truth. For instance (and just for starters) ... service to the unemployed just here in town ... there's the government paid consulting company who does the Targeted Wage Subsidy, the government paid consulting company who does the resume and job hunting training, the government paid consulting company who runs the Resource Centres, employment training and staff at the YM/YWCA, People in Motion, the EI office itself downtown ... all from the taxpayers' pockets and all with their own staff, office expenses and management.

Out of curiosity, what criteria are you using to evaluate programs for cuts?

Ummmm .... where did I say "cuts" in my post?

But since you asked, one of the first places I would look for savings would be internally - there's MASSIVE waste and money spent that could be done much wiser.

What makes more sense ... buying 100 pencils from the corner dollar store from petty cash or letting a contract to a major supplier for ten times the price? I think just about everyone knows that prices are always jacked up for government contracts and purchases. You can buy a toilet from Home Depot for $85 but the government lets a contract to a general contractor and all of a sudden that $85 toilet becomes $250 for the exact same thing. Advertising is another thing that governments get charged far more for. I remember when I was in the newspaper industry - we tripled our price for government ads over what businesses paid. Governments could save millions of dollars by having their purchasing departments working smarter.

Theft by employees is another area they could save a lot of money in. This includes the theft of company time - doing personal business (and entertaining themselves) when they are supposed to be working and using a government vehicle (and fuel) for personal things.

Governments quite often have this grandiose concept of bigger and better and more modern and have to be first with new ideas and concepts when in fact, they just need to be utilitarian to get the job done. A lot of all this "green" agenda has resulted in expenditures that have been totally frivolous in order to be viewed as following a program to save the freaking earth. Huge amounts of dollars have been spent in that arena and includes promotion and wholesale swallowing of the kool-aid to buy all the latest products to "prove they walk the walk" and to educate the public about why we should do the same. That, IMO, is not the job of governments. They've also paid gazillions of our money to special interest groups to support their green causes - again not the job of governments.

And that's just for starters. I'm sure each of us could point to some things that government wastes our money on internally.

[UnknownResident]

A lot of all this "green" agenda has resulted in expenditures that have been totally frivolous in order to be viewed as following a program to save the freaking earth. Huge amounts of dollars have been spent in that arena and includes promotion and wholesale swallowing of the kool-aid to buy all the latest products to "prove they walk the walk" and to educate the public about why we should do the same. That, IMO, is not the job of governments. They've also paid gazillions of our money to special interest groups to support their green causes - again not the job of governments.

But we're very far behind in terms of all this 'green' stuff. In fact we're frowned upon in the international community for not doing enough. Do you propose that it's all bogus and we're not messing up the Earth? If that's the case then I can see why you would think all this green stuff is nonsense, but to suggest it's not the job of the government when it's the government who's held accountable for it internationally is asinine. What do you suggest we tell other countries? We would love to do more but none of the green companies are able to stand on their own feet so I guess we're *bleep* on the subject? Come on GF we have to fund things that are going to move us forward, it's a tough pill to swallow but I think you're being short sighted.

[grammafreddy]

Quite frankly, if I was the federal government, I would tell the international community to go *f* themselves over all this green agenda.

[UnknownResident]

Quite frankly, if I was the federal government, I would tell the international community to go *f* themselves over all this green agenda.

And that's your opinion, which you're entitled too. However the majority of the scientific community seem to disagree with you, and think that global climate change is a real thing that we should be concerned about. I think there would be some sort of backlash if Harper told the international community that he doesn't believe in any of it, thus we're not going to do anything. Regardless of my opinion, or your opinion, people who are educated on the matter (which neither of us are, and neither is Harper) seem to think it's a problem, and I tend to believe them only because they know what they're talking about. We really don't.