Waste not

Hey there, time traveller!
This article was published 30/03/2012 (5097 days ago), so information in it may no longer be current.

True, Finance Minister Jim Flaherty wasn’t running with scissors as he made his way into the Commons to deliver his budget speech. But given the sad state of the federal books and some pre-budget Tory telegraphing, everyone knew Flaherty was going to do more than a few nips and tucks.

And so after a year-long review of more than $75 billion in direct government program spending, the government found more than $5.2 billion in cuts that will be phased in over the next three years. Most of the cuts will come from streamlining operations, ending duplication both within and between departments and consolidating various offices and functions.

About five per cent of federal civil service jobs will be cut — 19,200 in total.

Some programs are being merged with similar ones in other departments, while several will be eliminated entirely. That includes the National Round Table on the Environment and the Economy and the Public Appointments Commission Secretariat. The latter never actually did much work because the parties could never agree on someone to make the commissioner. Prime Minister Stephen Harper first announced the commission in 2006.

Other savings will come from requiring more teleconferencing and less travel, and from downsizing official residences overseas to reduce operating costs.

Members of Parliament and senators will be asked to contribute more to their pension plans, but not until after the next election. Public service pensions will be transformed to a 50-50 plan with civil servants eventually contributing the same amount as the employer.

“Neither the public service nor parliamentarians are contributing adequately to their pensions,” Flaherty said.

Manitoba Tory MP Shelly Glover, Flaherty’s parliamentary secretary, said the cuts the government is making are in line with the kind of efficiencies Canadians make in their own homes and the kind they expect to see from their governments.

“We’re cutting waste,” she said.

Growing

Budget 2012 isn’t just about cutting. Flaherty sees the budget as one that focuses Canada’s attention on drivers of growth, including innovation, business investment and people’s education and skills. The budget extends the hiring credit for small business for another year, allowing small businesses to reduce their employment insurance premiums by up to $1,000 if they hire new workers.

A program led by the Manitoba Chambers of Commerce — the ThirdQuarter Project — will be given $6 million over the next three years to expand into larger centres. The program was established to help employers in cities and towns with less than 250,000 people find experienced workers over 50 with the skills they need to match open jobs. Over 900 people have been hired under the project thus far.

There is also $50 million to expand the Youth Employment Strategy, $21 million to help connect employment insurance recipients with jobs and $74 million to allow EI recipients to keep more of the money they earn while on EI to make finding work more attractive.

It’s the economy, stupid

The global economy isn’t exactly roaring again but it has left Canada with a little bit of breathing room giving the 2012 budget a rosier glow than its predecessors in the last three years. Flaherty tabled a document projecting both spending and the federal debt as a share of the GDP will decline to pre-recession levels by 2016-17. The deficit — while still a rather large $21 billion — is less than anticipated even last fall and is now scheduled to be eliminated entirely by 2015-16.

There are 610,000 more Canadians working now than in 2009.

Private-sector economists estimate the economy will grow 2.1 per cent this year, and 2.4 per cent in 2013.

Flaherty said the political stability — and by that he means the fact the Tories are now a majority in the Commons — and the better fiscal outlook have given the government room to craft a budget that isn’t just looking at tomorrow, but next week, next year and even 10 years from now as evidenced by the changes in the age of eligibility for old age security and the guaranteed income supplement going up by two years.

What it means to Manitoba

Finance Minister Jim Flaherty was quick, and very happy, to point out the cuts in this budget will not come at the expense of transfers to provinces. Health, social and equalization transfers have been set to rise mostly with the cost of inflation over the next decade and that is not changing, he said. The budget also pledges to compensate provinces for any increase in provincial costs associated with the federal decision to delay eligibility for old age security and guaranteed income supplements until age 67 from age 65.

The Winnipeg-based Canadian Grain Commission will get $44 million over two years as it adapts to the new world of an open wheat market on the Prairies. The money is intended to get the commission on a self-sustaining footing as it adopts a new fee schedule now that the Canadian Wheat Board is not the only way to market wheat and barley on the Prairies. The CGC is the official regulator of grain handling in Canada, certifies Canadian grain and does scientific research on grain quality.

Lake Winnipeg got a nod in the budget without any specific money attached but with a pledge to improve the lake’s water quality.

Manitoba small and medium businesses can also benefit from a new Western Innovation Program under the Western Economic Diversification file.

Glover said the program is great news for Manitoba businesses who will be eligible for financial support to set up, expand or modernize their operations.

The province will also share in $99.2 million set aside to help with permanent flood-mitigation measures. There are no details yet on how much will flow to Manitoba or what it will be spent on.

mia.rabson@freepress.mb.ca