In an effort to save just over $15 billion in federal spending, newly appointed Treasury Board President Anita Anand has given cabinet ministers until Oct. 2 to make cuts to current spending plans.
Anand wrote a letter to federal cabinet ministers, many of who were assigned new portfolios in Prime Minister Justin Trudeau’s recent cabinet shuffle, telling them to make the cuts necessary to meet the Liberal’s 2023 budget promises.
“I am seeking your support to develop proposals to achieve these targets,” wrote Anand. “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.”
In March of this year, the Liberals announced a budget goal of saving $7.1 billion over the next 5 years by cutting spending on things like consulting, travel and professional services by 15%.
The letter also included a 3% cut in spending from departments and agencies by 2026-27, the cut estimates a savings of $7 billion over the next 4 years. The planned cuts are hoping to see combined savings of $1.3 billion from Crown corporations.
Once the proposals are submitted, they will be reviewed by public servants from the Treasury Board.
Of the estimated $15.4 billion in savings, only $500 million will be saved this fiscal year, indicated the budget letter. Details regarding the $500 million are expected to be included in future Parliament spending reports and more details about the 5 year plan will be presented in 2024 budget reports.
The 2023 budget said its goal is not to reduce overall annual spending in Ottawa but rather to return the amount, “back to a pre-pandemic path.”
In the 2022-23 fiscal year, total government expenses were $470.4 billion and that number is estimated to climb to $555.7 billion by the 2027-28 fiscal year.
Outside of the historical spending made in relation to the Covid-19 pandemic, the Liberal government’s current annual spending remains higher than what they had projected it to be prior to the pandemic occurring. In 2019, the budget was estimated to be a total of $402.2 billion for the year of 2023-24 however this year the budget was projected to be $490.5 billion.
In her fall 2022 economic statement, Finance Minister Chrystia Freeland had said that the books would return to balance by 2027-28 with a surplus of $4.5 billion dollars. The latest projections however are not congruent with Freelands 2022 economic statement. The federal deficit currently sits at $40.1 billion and is expected to decline to $14 billion by 2027-28.
The new budget letter by Anand doesn’t have outright plans to cut jobs in the government sector however, it will involve some redeployment and could potentially result in some job losses.
“This is about smarter, not smaller, government,” said Monica Granados, a spokesperson for Anand.
A recent Ipsos poll by the Montreal Economic Institute (MEI) found that most Canadians believe that the Trudeau’s government is spending too much, resulting in too high of taxes.
“Not only do Canadians find that the Trudeau government spends too much, but they also find that it spends unwisely,” said Renaud Brossard, senior director of communications for MEI.
“This seems to indicate a disconnect between the Department of Finance and the people whose money is entrusted in its care.”
55% of people respondents in the nationwide poll said that they believe Ottawa is overspending.
“The message Canadians are sending Ottawa is unequivocal,” said Brossard. “They are asking Ottawa to cut its spending, review its priorities, and reduce their tax burden.”