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The Peace Tower sits between the towers of the Senate on Parliament Hill in January of 2011.Sean Kilpatrick/The Canadian Press

The Conservative government is scrapping an entire team of auditors as two financial watchdog departments reveal the latest casualties of Ottawa's deficit fight.

Officials at Public Works and Treasury Board are outlining - after weeks of delay - how they will find the millions in savings first promised in the March, 2011, budget.

Public servants were called to meetings Monday afternoon at Public Works where the cuts - totalling $172.2-million and affecting 687 jobs over three years - were explained.

On the chopping block is Audit Services Canada, an auditing shop available for a fee to all other departments that bills itself as having "a 50-year track record of helping to improve public sector accountability and operations."

Officials at Public Works concluded, however, that the audit work could be done more cheaply by the private sector, so the office will be shut down. The department insists this will not impact the government-wide internal audit role, which was recently praised by the Auditor-General.

In all, 92 auditor positions across Canada will be terminated. Meanwhile, the Treasury Board - a department responsible for managing government spending - is confirming that it has trimmed $11.6-million from its budget, partly by reducing its communications and executive staff.

They are the latest of a group of 13 organizations that reported in the March, 2011, budget that they had found a combined $2.6-billion in cuts. However, details from each organization are only trickling out now.

The decision to eliminate auditing jobs at Public Works is raising eyebrows given the department's close connection to political contracting scandals throughout history. The department is in the midst of overseeing a $35-billion wave of military purchases - including new ships and icebreakers - that carries political implications as Canada's regions battle over the contracts.

National Defence, which promised the most cuts of the 13 organizations, has yet to break down its plans.

NDP MP Nycole Turmel, a former public service union president, expressed concern that Public Works would cut back on auditing given its association with the sponsorship scandal of the 1990s.

"You remember the scandal, what happened with the Liberals?" she said. "This government decided to cut the auditors to start with plus the other jobs that will be cut. … it's really sad. What are we doing to our public sector?"

But scrapping an entire program on the grounds that it duplicates services available in the private sector also provides a concrete example of the government's approach to restraint. Many experts have advised the government that it's better to scrap ineffective programs rather than cutting all programs across the board.

"We have taken a close look at spending and identified the lowest-performing, lowest-priority programs with anticipated savings totaling close to $98.6-million [annually]to Canadian taxpayers," Michelle Bakos, a spokeswoman for Public Works Minister Rona Ambrose, said in an e-mail. "This has no impact on internal auditing services."

An internal note from Public Works says 687 positions will be eliminated across the department of more than 14,000 employees. A separate letter from the department breaks down the locations of the 92 auditing jobs.

Gary Corbett, president of the Professional Institute of the Public Service of Canada, said public servants are being told they will be given priority consideration for other public-service jobs. However, Mr. Corbett said many jobs are very specialized.

"You can't take a rocket scientist and make an insect scientist out of them," he said.

The internal Public Works note says the reductions will primarily affect the national capital area of Ottawa and Gatineau, which will be asked to absorb 81 per cent of the job cuts.

The strategic review is the precursor to the "Strategic and Operating Review," which is just beginning. That process, led by Treasury Board president Tony Clement and a small committee of cabinet ministers, is responsible for finding $4-billion in continuing annual savings across government.

It's a key part of the government's plan to balance the budget by 2014-15.

The Cuts

Thirteen federal organizations promised in the 2011 budget to cut a combined $2.6-billion over three years under a program called strategic review. Details of these cuts are slowly trickling out from each department.

Public Works

Public servants at Public Works were told Monday that about 687 jobs will be eliminated over three years, including 92 auditors. The department is counting on attrition to manage these job cuts. "As people leave and retire, the positions, along with the salary dollars will be abolished," states an internal memo.

Treasury Board

The department responsible for managing the spending of other departments confirmed Monday it is cutting 19 positions. All of the jobs are tied to its "regional communications network" and will include some executives.

Fisheries and Oceans

Calls for search and rescue in Newfoundland will no longer go to St. John's, but rather to a centralized call centre in Halifax. About 275 positions will be eliminated and the department plans to move away from annual quotas for some fish stocks.

Bank of Canada

The bank is planning a reduction of 80 to 95 positions by April 1, 2012, through a mix of attrition and layoffs.

Environment Canada

About 50 term employees were recently told their jobs will be eliminated by the end of the month. The positions include scientists and scientific support staff.

National Gallery

Five curators at the gallery in Ottawa were recently told their positions will be terminated as a result of an internal spending review.

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