Ottawa scraps review on finding $9 billion in taxpayer savings just weeks after tabling Budget 2023

In Budget 2023, Ottawa pledged billions in savings. The federal government has since scrapped a review to save taxpayers $9 billion over five years.

According to the Parliamentary Budget Officer (PBO), the quietly-cancelled Strategic Policy Review — pledged in Budget 2022 — would have assessed the effectiveness of government programs and how to adapt them to "a new post-pandemic reality."

Ottawa promised an update on the review's progress and further details in this year's budget — a promise reiterated in last fall's economic statement. However, PBO Yves Giroux notes the review is not mentioned anymore.

"Budget 2023…does not reference the government's 'comprehensive Strategic Policy Review' and instead proposes to achieve savings by 'refocusing government spending' through predetermined spending reductions," reads a PBO analysis on Budget 2023.

The PBO also notes the budget did not assess program effectiveness as promised and has since been replaced by another pledge of "cross-government program effectiveness reviews."

By Budget 2024, the first reviews will examine "skills training and youth programming" to determine "improvements can be made."

Despite reducing overall spending by $3.8 billion, citing less reliance in 2021/22 on COVID business supports, the PBO said aside from proposing "roughly 15%" less spending on management consulting and travel, Ottawa failed to identify how best to adapt government operations for a "new post-pandemic reality" as the Strategic Policy Review promised.

The government also proposed a 3% cut in "eligible spending" by departments and agencies by 2026/27. They committed to working with federal Crown corporations to achieve "comparable spending reductions" in that period.

Ottawa estimates these measures would save taxpayers $15.4 billion over the next five years. They are expected to reduce or delay previously announced unallocated funding, saving an additional $6.4 billion over six years.

The PBO also criticized the government for revising its fiscal Outlook, with no sign of returning to a balanced budget for the next five years.

"This budget is giving taxpayers big deficits, more money wasted on interest charges and higher taxes," said Franco Terrazzano, Federal Director of the CTF. "This government doesn't care about fiscal prudence or helping taxpayers."

The deficit is expected to reach $40 billion in 2023, almost $10 billion higher than forecast in the fiscal update. The Taxpayers Federation claims there is no plan to balance the budget, with the government overspending Budget 2022 by $18 billion.

Since last fall's economic statement, revisions to the private sector economic outlook and fiscal developments have lowered the budgetary balance by $26.1 billion over five years — or an average of $4.4 billion annually. But that was before including new spending measures.

"Following this downward revision, the government announced $69.7 billion in new spending that was partially financed by $14.0 billion in revenue-raising measures and by $12.8 billion in spending restraint measures," said Giroux in a press release.

According to the CTF, the government pledged to find $3.95 billion in savings in 2023, but total spending is still increasing by another $20 billion in 2023 to $490.5 billion. "If you're spending more money, you're doing a bad job of finding savings," said Terrazzano on March 10.

The debt will total $1.2 trillion by the end of this year, with interest charges on the debt costing taxpayers almost $44 billion in 2023 and reaching $50 billion in 2027. 

"A balanced budget means less debt for Canadian kids and grandkids to pay back, less money wasted on interest charges and room to cut taxes," said the federal CTF director.

The PBO's recent Economic and Fiscal Outlook projects the deficit to increase to $43 billion in 2023. They are launching an $8.7-billion deficit in 2027/28 instead of the previously projected surplus of $4.5 billion last fall.

A new survey from Nanos Research conducted for CTV News found that 70% of more than 1,000 respondents are either "concerned" or "somewhat concerned" about increasing the budget deficit to $40.1 billion this year — almost $10 billion more than anticipated in last fall's economic statement.

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