As finance minister Jim Flaherty reintroduced the federal budget, Canadians learned the government is going to cut billions of dollars, but citizens still don’t know where the money will come from.
The government is pledging to balance the federal books by 2014-15, a year earlier than scheduled. But to do so, it will have to find $4-billion in annual savings.
A special cabinet committee will do a strategic operating review of $80 billion in government spending in 2011-2012. They will be looking for $4-billion in cuts, which equals about five per cent of total government spending.
“Five per cent shall be found and it shall be found in the next year,” Flaherty said before tabling the budget.
“In the private sector this would be viewed as not very ambitious,” he added.
The Conservatives have added an additional challenge to the task; promising not to raise taxes or cut transfers to people or other levels of government.
The review is long overdue, according Flaherty.
“It is really quite amazing if not shocking that there has not been an operating review in 15 years,” said Flaherty.
On the chopping block will be programs that have outlived their usefulness, according to the finance minister. He also said the government won’t be convinced to save the program based on outcries from the individuals that use them.
The cuts won’t happen until 2012-2013 and the government won’t say where they are before then.
“It’s not responsible to book savings until we can say here’s where the savings are,” the finance minister said in the media lock-up.
The plan to cut with out a specific explanation of where the money would come from sparked outrage from the opposition parties.
New Democrat leader Jack Layton accused the Conservatives of hiding their intentions on purpose.
“This government used to pride itself on being accountable, transparent, everything was going to be open. We’d all know what was going on. It looks like billions of dollars are being hidden away so our job as the official opposition is to root out what the government is hidden away,” he said.
Liberal leader Bob Rae said the plan to balance the budget was unrealistic, especially since the Canadian public is not being told where the cuts will come from.
“What is this supposed to be a miracle? Two loaves and three fishes,” Rae said.
Meanwhile, Green Party leader Elizabeth May attacked how the government plans to find the cuts – in a secret Cabinet committee.
“Why not take that make it more open and allow parliamentarians and Canadians to see where the cuts are going to be made because the amount of the cuts sounds like it could absolutely devastate our public service,” she said.
Others said the government belt-tightening was welcome.
“This is quarters, dimes and loonies on the sidewalk,” said Ian Lee of Carleton’s Sprott School of Business. “A five per cent cut is small change compared to the Martin years when he reduced spending by 12 per cent.”
Derek Fildebrandt of the Canadian Taxpayers’ Federation said the commitment to balancing the budget was a positive one, but that he was hoping to get a hint of what the cuts would be.
“We want to see some concrete measures behind that, which means, not just trimming of the public service, but eliminating redundant services,” he said, adding that he would like to see equalization payments and corporate tax breaks cut as well.
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