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Liberal spending review so far identifies no cuts, but highlights new spending

A Liberal government pledge to root out waste and inefficient programs has yet to identify any spending cuts.

Instead, the government is using the review to justify new spending.

The plan for a wide-ranging spending review was laid out nearly a year ago in the 2017 budget, but a promise to show results in the 2018 budget never materialized.

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The 2017 budget promised a “comprehensive review” of at least three federal departments that would “eliminate poorly targeted and inefficient programs, wasteful spending and ineffective and obsolete government initiatives.”

It also promised a detailed review of the $10-billion-a-year federal budget for purchasing and maintaining fixed assets, such as government buildings. A third element – which was addressed in the 2018 budget – promised to review federal innovation programs.

A spokesman for Treasury Board president Scott Brison – who shares responsibility for the reviews with Finance Minister Bill Morneau – said in a statement that the remaining work is still under way and details will be announced later.

After several days of gathering information, Mr. Brison’s office provided The Globe and Mail with a brief update on what has been accomplished to date. The statement did not identify any specific savings. In fact, the statement highlighted new spending.

“The departmental reviews examine the department’s governance and 100 per cent of its programming to ensure that the programs are efficient, effective and aligned with government priorities,” spokesman Jean-Luc Ferland said. “While these reviews are yet to be completed, the review of [the Canada Border Services Agency] has already helped inform the $85.5-million investment announced in Budget 2018. Furthermore, the Health Canada review helped inform the creation of the Department of Indigenous Services and Budget 2018’s $1.5-billion investment in indigenous health.”

The Canada School of Public Service is the third organization under review.

Conservative Treasury Board critic Gérard Deltell said his party supports the notion of spending reviews, but questions the government’s fiscal discipline in light of its plans for an $18.1-billion deficit with no plans for returning to balance.

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“We are not very surprised,” Mr. Deltell said, in reference to the fact that the Liberal spending review was not updated as promised in the Feb. 27 budget. “When you have a government that, in the big picture, decides to have a big deficit, three times as big as expected, with no zero-deficit target, this is why there is no seriousness in this government when it comes to being careful when spending public money.”

Sahir Khan, a former expenditure-management director at Treasury Board, said Ottawa needs to be more transparent about its spending reviews. He noted a similar process announced in the 2007 budget under the Conservatives produced a clear breakdown in following budgets that showed where savings were found.

“The current government’s initiative, while positive, appears to fall short of the 2007 benchmark,” said Mr. Khan, who is now executive vice-president of the University of Ottawa’s Institute of Fiscal Studies and Democracy.

Political pledges to root out waste are common in political platforms at all levels of government.

The federal Liberal Party’s 2015 election platform promised to find $3-billion a year in annual savings through a review of federal spending, including a review of tax credits.

Some of those pledges have been acted on. The controversy over the past year related to small-business tax changes was related to the Liberal review of various tax credits that can reduce taxes paid by individuals and businesses.

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The Parliamentary Budget Officer has estimated that one aspect of the small-business tax changes related to income sprinkling will bring in more than $400-million a year in new federal tax revenue. The federal government estimated in the 2018 budget that another small-business change related to passive investments would bring in more than $700-million a year by 2022-23.

The government has also followed through on a campaign pledge to reduce Ottawa’s advertising budget. The latest federal data shows annual spending is around $36-million, which is down from $68.7-million in the last full year under the Conservatives.

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