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Illustration by Anthony Jenkins (The Globe and Mail)
Illustration by Anthony Jenkins (The Globe and Mail)

Jeffrey Simpson

Waiting for smaller government? Don't hold your breath Add to ...

Of all the Harper government's curiosities, none is more telling than those surrounding the role of government.

Time and again, the Prime Minister and his cabinet tell Canadians about the virtues of smaller government. Along with "tough on crime" and "lower taxes," smaller government forms the red meat trilogy the party delivers to its core voters and, presumably, to other Canadians.

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Except that, over the past five years, the number of Harper ministers has grown, the civil service and military have soared by more than 30,000 people, spending leaped before and during the recession, the government's actual and projected deficits have been twice as large as the surpluses from 1996 to 2006, and the government's plan to restore fiscal balance is leisurely, to say the least, and is being attacked as unreliable by three independent studies.

The only mild restraint this supposedly "conservative" government implemented wasn't really restraint at all. It was, instead, a department-by-department review intended to identify 5 per cent of low priority spending for reallocating to other purposes.

In contrast to this mild effort, the government added many new programs and created new agencies (such as ones for regional development for the North and Southern Ontario). It pockmarked the tax code with all sorts of little credits (for sports equipment, apprentices' tools, truckers' lunches etc.) and added some big tax expenditures such as Tax-Free Savings Accounts and the Child Benefit that is the same as the previously discarded and discredited family allowances.

In good times and bad, the Harper government has been the antithesis of what one would expect from textbook "conservative" preachers of small government. Nothing suggests the next budget will change the government's course.

It's fair for the government to say that some of this growth reflected its priorities: more prison guards and RCMP officers, soldiers and food inspectors. All governments do new things, and they need public officials to implement the policies. But for a government nominally committed to holding the line, you might expect reductions in personnel elsewhere.

This government, however, just doesn't want to make hard decisions. For example, it's cutting the number of civil servants through attrition, and instructing senior civil servants to find the savings in "administration."

These across-the-board cuts, as any private-sector executive or university president will tell you, are the antithesis of good management. When times are tough and cutbacks required, good managers decide on priorities, keep resources there, and reduce resources elsewhere. It's called judgment, management and setting priorities. Cutting across the board is an abdication of management, although it's the least politically painful (which, presumably, is why this government has adopted the strategy).

One result of this approach is the emergence of a structural deficit - which means, in simple language, a deficit even with a strong economy. As is its wont, the government denies this fact - it often rejects expert opinion with which it disagrees - but the Parliamentary Budget Office, the 3D Policy group of two former senior finance officials, and the International Monetary Fund say the government is wrong. The IMF's December report said there were "significant risks to long-term fiscal sustainability."

All three believe Ottawa will remain in deficit in 2015-2016, the year the government predicts a small surplus. The previous year, 2014-2015, the government says the deficit will be a minuscule $1.7-billion, whereas the PBO and IMF suggest a deficit of $10-billion to $14-billion.

All three urged the government to start talking to Canadians about the challenges caused by slower growth, an aging population and slumping productivity. There's no chance of this happening with a government in a minority situation, possibly facing an early election, and having systematically shied away from making hard decisions or raising painful issues with the public, as its record shows.

From 2008-2009 to 2015-2016, the Harper government will have added about $200-billion to its debt, some but only some to fight the recession, about twice the surpluses the government ran from 1997-1998 to 2008-2009.

The "conservative" government is counting on (praying for?) strong economic growth and mild across-the-board departmental cuts to meet deficit-reduction targets, thereby once again avoiding hard decisions.

 

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