OTTAWA — Canada’s budget watchdog has cast doubt on the government’s stated plans to cut operating budgets by $300 million this year.
In a new report, Parliamentary Budget Officer Kevin Page says he has only been able to identify $180 million in savings so far from government estimates, but notes the Harper government has not been forthcoming with information.
Given that 67 per cent of departmental operating costs are personnel costs, the budget officer says staff cutbacks will be needed to meet the targets, as the government has acknowledged.
But Page says a questionnaire sent to 10 of the largest departments representing over half the public service has found either no plans on how they intend to reduce personnel or insufficient reductions.
And one organization, Correctional Services, is bucking the trend with plans to hire an additional 4,119 employees, negating most of the cuts from the other nine departments.
Of the 10 departments with about 160,000 employees, current plans would only reduce staffing by about 1,000 in the medium term, the report states.
Complicating the problem is that Ottawa has signed contracts with public sector unions for salary increases of about 5.3 per cent over the next three years.
“Few organizations identified the operating budget freeze as a consideration in human resource planning or presented a strategy to address this risk,” the Page report states.
“Overall, there is limited evidence that current plans will meet the president of the Treasury Board’s public service attrition target.”
Ottawa has budgeted savings of $300 million this year, $900 million next and $1.8 billion in 2012-13 and subsequent years.
The cost-cutting has been a central feature of Ottawa’s efforts to eliminate the deficit in five years, which the PBO again questioned Thursday in a separate paper showing even the International Monetary Fund believes the goal will not be met.
The IMF projects Ottawa will have a deficit of about $5.4-billion in 2015-16, a year in which Finance Minister Jim Flaherty predicts a $2.6 billion surplus — an $8 billion disparity.
The Page report does not explicitly declare that Ottawa is falling behind on its cost-cutting initiative, in part because he concedes the government has not released all the relevant information, claiming cabinet confidentiality.
The budget officer asks MPs to make greater efforts to obtain information by inviting deputy ministers to committees to explain their staffing plans.
He praises one department, Human Resources and Skills Development, for putting in place a strategy to reduce staff by 3,558 while maintaining service to the public.
Two organizations, Corrections and the RCMP, did not even respond to his request for information, Page said.