OTTAWA — Canada’s budget watchdog is casting doubt on Ottawa’s ability to save billions of dollars through cutbacks and staff attrition — a key element of the federal government’s plan for eliminating the deficit over the coming years.
In his most recent critique, Parliamentary Budget Officer Kevin Page says the government has yet to unveil a strategy for the deep cuts it needs to achieve to balance the budget in five years.
Through his own investigations, Page said he has only been able to find $180 million of the $300 million in savings scheduled for the first year.
And this year was the easy part, he says. Next year, Ottawa needs to realize $900 million in cuts from departmental operating budgets, and the target rises to $1.8 billion the following year, and the two subsequent years.
Over the next five years, Ottawa wants to cut departmental operating budgets by $6.8 billion.
But the parliamentary officer, who has the task of providing a non-partisan, independent analysis of the government’s budget and spending, said the math doesn’t add up — at least not so far and not from what he’s seen.
Page admits that part of the problem is that the government has not been forthcoming with information, and has asked MPs to put deputy ministers to the test through hard questioning at committee hearings.
“There is not a piece of paper to my knowledge on what the plan is to achieve $6.8 billion in savings. That’s a huge fiscal gap,” Page said.
Treasury Board President Stockwell Day, the point man on ensuring the cutbacks happen, has said there will be some savings from attrition as about 11,000 federal employees leave or retire annually.
But Page said the kind of numbers the government is talking about would require almost that many staff positions to be eliminated, and there’s no indication Ottawa has made such plans.
His office sampled 10 departments representing 160,000 employees — more than half the public service — and found plans to eliminate about 1,000 positions over the next three years.
“That’s 1,000 not 11,000,” Page said.
One organization, Correctional Service of Canada, is bucking the trend with plans to add 4,119 employees, negating most of the cuts from the other nine departments.
Ottawa has also signed contracts with public service unions for salary increases totalling about 5.3 per cent over the next three years.
Of the departments asked to submit strategic plans for eliminating jobs, only one — Human Resources and Skills Development — responded with a strategy of how it will cut 3,558 employees while maintaining service to the public.
Two organizations, Corrections and the RCMP, did not respond at all.
“Few organizations identified the operating budget freeze as a consideration in human resource planning or presented a strategy to address this risk,” Page says in the report.
“Overall, there is limited evidence that current plans will meet the president of the Treasury Board’s public service attrition target.”
Responding the Page’s report by email, Day said his government is on track to eliminate the deficit.
“Retirements and attrition are just one part of our plan, and over the next few years, those factors will provide departments with some flexibility to manage the size of their workforce,” Day said.
Page has often questioned the government’s deficit projections, and on Thursday he noted the International Monetary Fund, which has backed Finance Minister Jim Flaherty’s broad approach, also quibbles with the minister’s estimates.
The IMF’s prediction is that Ottawa will still have a deficit of about $5.4-billion in 2015-16, the year when Flaherty predicts a $2.6 billion surplus — an $8 billion disparity.
Speaking at an event in Montreal, Liberal Leader Michael Ignatieff said the Harper government has proven untrustworthy in its budget predictions.
“This is a government that has increased the size of the Canadian government over the past three or four years. Mr. Page is saying, ’Mr. Flaherty, your numbers don’t add up,’ and we agree with Mr. Page,” Ignatieff said.