Federal cabinet ministers have been given an Oct. 2 deadline to come up with specific cuts as part of an effort to shave about $15-billion from existing spending plans, according to a letter obtained by The Globe and Mail.
New Treasury Board President Anita Anand delivered the deadline in writing to her cabinet colleagues, meaning many ministers in new roles only have a few weeks to find cuts that were first promised in the 2023 budget.
The March 28 budget announced a goal of saving $7.1-billion over five years through a 15-per-cent cut to discretionary spending on consulting, professional services and travel over five years. It also announced a planned phase-in of a 3-per-cent spending cut by departments and agencies by 2026-27, with a goal of saving $7-billion over four years. As well, both plans are expected to produce continuing savings in future years. And Crown corporations are expected to find a combined $1.3-billion in savings over four years.
“I am seeking your support to develop proposals to achieve these targets,” Ms. Anand writes in the letter. “In particular, organizations should review their programming to identify where there might be duplication, programs with lower value for money, or programs that do not address top priorities of the government.”
The Treasury Board minister said any savings should be sustainable and not create any pressure on service delivery.
The letter was sent to ministers just days before a cabinet retreat that is scheduled to take place in Charlottetown next week.
Prime Minister Justin Trudeau’s decision to shift Ms. Anand from the defence portfolio to the Treasury Board was one of the main surprises of last month’s substantial cabinet shuffle. While some observers viewed the move as a demotion, Ms. Anand has said in recent media interviews that she is taking on an important role in the government’s core economic team.
During a visit earlier this month to Nova Scotia, where she was born and raised, she told the SaltWire news agency that the President of the Treasury Board is like the chief operating officer of government and is a person who sees every policy before it goes out the door.
“We shouldn’t underestimate that position,” she said.
In her letter to cabinet ministers, Ms. Anand said each of them will be required to personally approve every proposed spending cut coming from their department.
“Each submitted proposal will need to be described in a template,” she wrote, adding that they must be submitted to the Treasury Board Secretariat by Oct. 2 at the latest.
After ministers hand in their plans, the letter said they will be reviewed by public servants in Ms. Anand’s department.
The budget indicated that only $500-million of the $15.4-billion in spending cuts over five years will be booked in the current fiscal year. That means details on this $500-million will likely be included in spending reports to Parliament known as the supplementary estimates. Further details would be presented in the 2024 budget and related estimates reports.
The goal, as stated in the 2023 budget, is not to reduce the total amount Ottawa spends each year, but rather to “normalize” government spending by bringing the pace and scale of growth “back to a pre-pandemic path.”
Total government expenses are projected to climb from $470.4-billion in the 2022-23 fiscal year to $555.7-billion in 2027-28.
While the COVID-19 pandemic led to historic levels of emergency spending on time-limited support programs for businesses and individuals, the government’s annual spending has since settled at significantly higher levels than had been projected before the pandemic.
For instance, the 2019 budget projected $402.2-billion in total expenses for 2023-24, while this year’s budget said it will be $490.5-billion.
The size of the federal deficit is projected to be $40.1-billion in the current fiscal year, declining to $14-billion by 2027-28. Those 2023 budget projections marked a deterioration from Finance Minister Chrystia Freeland’s 2022 fall economic statement, which said the books would return to balance in 2027-28 with a $4.5-billion surplus.
The budget announcement to cut back on consultants followed a series of Globe and Mail reports on the spike in outsourcing costs. Spending on professional and special services increased to $14.6-billion in the 2021-22 fiscal year, which was 74 per cent higher than when the Liberals promised in 2015 to reduce spending within that category.
Parliamentary Budget Officer Yves Giroux has questioned why increased spending on outsourcing has overlapped with significant growth in the number of government workers. The size of the federal public service stands at 357,247 employees in 2023, up from 257,034 in 2015, an increase of 39 per cent, or more than 100,000 people.
Canada’s population grew by about 11 per cent during that same period.
A spokesperson for Ms. Anand told The Globe that the review process is not expected to result in job losses outside of normal attrition or redeployment.
“This is about smarter, not smaller, government,” Monica Granados said.
Union leaders representing federal public servants say they haven’t been consulted.
Chris Aylward, national president of the Public Service Alliance of Canada, the largest union of federal government workers, said PSAC is calling on Ottawa to develop a government-wide staffing plan to address recruitment and retention issues in some areas.
“The government needs to pause these cuts,” he said.
“This proposed timeline is of more concern, as these changes are being rushed and conducted in silos,” he said in a statement. “As we said when the budget was released, you can’t cut $15-billion in public-service budgets without cutting services to Canadians or the jobs of the workers who provide those services.”
Jennifer Carr, president of the Professional Institute of the Public Service of Canada union, said in an interview that her members come across examples of wasteful spending and would be willing to contribute to the review.
“I’m sure we could help them find savings and efficiencies. But we have to be at the table in order to do that,” she said.