Sunday, July 10, 2011

Pre-Budget Consultations - Time For Some Spending Cuts

As the government is conducting pre-budget consultations, we better remind them that it's time to reign in public spending:
During the recent election, the Conservatives pledged to be more fiscally conservative by promising to balance the budget a year earlier, 2014-15 instead of 2015-16. Extra budget savings would be generated by the government’s Strategic and Operating Review, a one-year review of program spending — excluding transfers to individuals and governments — that was designed to “realize substantial additional savings through greater efficiency and effectiveness.” (Emphasis added.)

From 2012-13 to 2014-15, the government plans to find $7-billion in efficiencies, including $1-billion in 2012-13, $2-billion in 2013-14 and $4-billion in 2014-15. While the government claims these savings are “substantial,” they amount to a mere 2% in savings from the $352.5-billion in departmental spending planned from 2012-13 to 2014-15. The Conservatives also promised an extra $4.6-billion in new spending during the election, which wipes out most of the savings.

With a significant deficit and no credible plan to balance the budget, this is not the time for marginal belt-tightening. Canada needs real and substantial spending reductions that either significantly cut programs or eliminate them entirely.

To decide which programs to cut and/or eliminate, the Conservatives should look back to the 1990s at the then-Liberal government’s review of program spending. The Liberals balanced the budget in part by cutting transfers to provinces and they also made substantial reductions to departmental spending.
And there's absolutely no excuse for the government to keep throwing money around, subsidizing talentless artists, special interest groups and NGOs.
Of the 10 boats of the flotilla currently stuck in Greek waters, one of them is Canadian: The Tahrir, or Liberty in English, if you prefer.

More than $300,000 had to be raised to sail this ship. The Montreal-based NGO Alternatives Internationales supported the project by “providing its administrative and financial management skills.”

In other words, they were the main bagman of the whole fundraising effort. In their ads to convince Quebecers and Canadians to donate, they brag about their official partnership with the Canadian International Development Agency. In fact, over the last few years, Alternatives has received more than $5 million from the federal government. For 2010-2011, they got $769,828 as a “Partner for Democratic Governance” from CIDA.

It’s all very surprising considering Foreign Affairs Minister John Baird recently discouraged Canadians from participating in the flotilla, describing it as “provocative and, ultimately, unhelpful to the people of Gaza.” Unfortunately, the minister seems to have as little success convincing the Israelophobe activists as he has with his own bureaucrats who keep funding an organization that is more preoccupied with promoting its radical leftist ideology than truly bringing humanitarian or democratic aid.
To that there's a great solution called zero-based budgeting. And, actually, the government did make a few steps in that direction, by announcing that one-time grants shouldn't be regarded as permanent "base" funding. Still, it's time to fully adopt zero-based budgeting, at least in the non-essential departments, so that, instead of the government having to justify its decision to reduce funding, the onus would be on the departments to explain what the money is for.

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