
The National Post just completed a four-week feature of proposals to cut federal spending with the goal being to find $20-billion in cuts to balance the budget by 2013 or sooner. Incredibly, even with these extremely bold cuts, it would still take until fiscal 2013-14 to do it.
As David Akin writes in the Ottawa Citizen, cutting spending isn’t as easy as it sounds. Every new MP, Finance Minister, and Treasury President thinks they can come in and cut the fat, but almost none of them ever succeed.
The last time a government managed to cut a significant portion of the budget, was the 1996 Paul Martin Liberal budget that contained $11.7 billion worth of cuts. Some were good, some were bad, but they did manage to get the budget under control again. Of course, we mustn’t ignore the $54 billion surplus of Employment Insurance that the government used to pay down the debt.
Although it’s become more clear than ever that Canada’s deficit will spiral out of control unless spending is reigned in or taxes are raised, the Harper government is “spending the course”. We’ll get to see on Thursday what this “road map” back to a balanced budget will look like [some time in the year 2020].
Spending under Finance Minister Jim Flaherty, writes David Akin, has been almost uniformly unrestrained. He increased spending in the first budget of 2006 by 6.3%, in 2007 by 4.8%, and in 2008 by just 2.6%. But when the recession hit he threw caution into the wind and splurged for a 14.1% increase over 2008 with an unprecedented “stimulus” package.
So what would I cut? Looking at Terence Corcorans graph, I would definitely agree that cutting the Southern Ontario Regional Development Agency for $900-million would be a great start. This was a program owned solely by the Harper government. Unfortunately, this whole “stimulus” has been deeply integrated with the creation of new regional programs and agencies.
Killing the carbon capture program at a $1 billion savings is also a good idea. The various other regional development agencies and tax credits in Atlantic Canada could be axed for $3.4 billion. There’s no question the eHealth fiasco is a waste of money at $1.5 billion. The $9.4 billion cuts to the civil service is an inevitable and integral part of balancing the budget as well, and precisely what Paul Martin did. The elephant in the room is, of course, the equalization program and federal transfers, shaving over $25 billion over four years.
But $4.33 billion in cuts to the military over four years? Surely we don’t want to go back to a time where our military is underfunded and stretched to the breaking point again, after just coming out of decades of darkness? Even at current military spending, we’re due to fall behind on inflation alone.
Military spending in Canada is an embarrassing 1.38% of GDP from 2008, good for 120th place in the world ranking. We’re only doing 0.2% better than we were in 2005 under the Liberals, when we were in 130th place.
What other country in the G8 would spend such an abysmal level on their military? Only Canada can get away with it due to their proximity of the United States.
Of the G8 nations, the allied powers from the second world war all spend the recommended 2% minimum of GDP on defence: France [2.6%]; Russia [3.9%]; United Kingdom [2.4%]; United States [4.06%]; while Germany [1.5%] and Italy [1.8%] still exceed Canadian spending despite post-war restrictions to their military. And while Japan only spends 0.8% of GDP, it’s still twice that of Canada’s budget.
I wrote a piece last year identifying $4.98 billion in program spending cuts, including a suggestion to axe the following:
1. CRTC $55.6 million. What service does it provide other than ensure cell phone rates are prohibitively high?
2. Citizenship and immigration $667 million on an “integration” program that clearly doesn’t work.
3. Refugee Board $15.2 million. Eliminate appeals program.
4. Status of Women $25.3 million for affirmative action programs.
5. Human Rights Commission $22 million by eliminating this Stalinist legal authority.
Then of course there’s the $1.1 billion CBC subsidy and the $80 million long gun registry that nabbed the dangerous desperado Toronto Star columnist Joe Fiorito.


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