New year-end numbers reveal the federal government quietly cut spending by $8-billion after Canadians handed the Conservatives a majority mandate.
The Conservatives fought an election over their 2011 budget plan, which was first introduced in March of that year before the opposition parties defeated the minority government. The same budget was re-introduced in June of 2011 after voters gave Prime Minister Stephen Harper a majority.
The 2011 budget was not billed as a cost-cutting budget, but the Public Accounts year-end figures, tabled Tuesday, reveal Ottawa quickly scrapped its spending script.
After winning its first majority government, the Conservative government appears to have targeted the infrastructure-heavy stimulus spending the opposition demanded during the recession.
Infrastructure programs such as the federal Green Fund and the Building Canada Fund came well short of spending their approved budgets.
The Public Accounts cover the fiscal year that ended March 31, 2012. The reports contain a section that compares the year’s final spending numbers to what was projected in the 2011 budget. It notes that “program expenses” were $8-billion lower than what the 2011 budget projected.
To put that figure in context, the 2012 budget – which was billed as the first post-stimulus cost-cutting budget – promises to find cuts that will ultimately ramp up to just over $5-billion a year by 2014-15.
Finance Minister Jim Flaherty said the numbers show the government is doing all it can to control spending.
“Yes we wound down stimulus spending,” said Mr. Flaherty.
“There was some stimulus spending that extended into the last fiscal year. We’re asked whether we need to continue this spending or not. We were very clear about infrastructure spending, that it was not going to continue indefinitely. It was there for a purpose during the time of the great recession.”
The Federation of Canadian Municipalities isn’t concerned by the unspent cash, which it views as an accounting issue. President Karen Leibovici said in a statement that “any discrepancy in the numbers reflects changes in the timing of federal payments, not a change in its promise to invest.”
But the government’s critics say the latest figures are another example of Parliament being kept in the dark when it comes to Conservative spending cuts.
“It speaks to the lack of transparency and really the fundamental lack of accountability with Canadians,” said NDP finance critic Peggy Nash.
“People need to know what programs are being cut, what services are being undermined.”
The 2011 budget forecasted a 2011-12 deficit of $32.3-billion. The lower program spending allowed the deficit to come in $6-billion below that forecast.
It is not entirely clear in the Public Accounts as to exactly why or how federal program spending came in so much lower, though there is some detail.
One chart breaks down the main parts of the $8-billion this way: $2.2-billion less on “major transfers to persons,” which is largely due to Ottawa spending $1.9-billion less on Employment Insurance benefits than expected. Another part shows $1.4-billion less in “major transfers to other levels of government,” which is explained as a change that reflects the move by the B.C. government to return $1.6-billion in “transitional assistance” after deciding not to join the Harmonized Sales Tax.
However, another $5-billion is simply explained as “lower-than-expected spending by departments.”
The Parliamentary Budget Office is planning a closer analysis of this category, but says a big part of the change appears to have taken place at the Office of Infrastructure of Canada.
The Public Accounts show Infrastructure Canada had an approved budget of $6.3-billion, yet only used $4.5-billion. As part of that, the Building Canada Fund for Major Infrastructure was approved to spend $1.2-billion that year, yet only used $759.8-million. A Green Infrastructure Fund was approved to spend $390.7-million, yet only $30.3-million was spent. A Canada Strategic Infrastructure Fund was approved for $481-million, yet only $188-million went out the door.