The Treasury Board has given Trudeau's Cabinet an ultimatum — cut spending by $15 billion or risk continued financial uncertainty.
In a letter penned to Cabinet, Treasury Board President Anita Anand gave her fellow Cabinet ministers a firm deadline of October 2 to cut current spending.
Budget 2023 outlined several promises on areas the government would cut spending, including $7.1 billion on consulting and travel, $7 billion from departments and agencies, and $1.3 billion from Crown corporations.
"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, the feds pledged $7.1 billion in savings over the next five years by cutting consultancy, travel and professional service fees by 15%.
The letter also referenced $7 billion in savings from departments and agencies by fiscal year 2026/27 and planned cuts of $1.3 billion from Crown corporations.
Once Anand receives the detailed proposals, public servants from the Treasury Board will review them.
Of the estimated $15.4 billion in savings, the Board president says the federal government will only save $500 million this fiscal year. Details on the breakdown are expected in the five-year plan presented in Budget 2024.
While Budget 2023 contends their goal is to return spending "to a pre-pandemic path," the Parliamentary Budget Office (PBO) said the quiet cancellation of the Strategic Policy Review — promised in Budget 2022 — ended Parliamentary discussions on saving taxpayers $9 billion over five years.
Had the review continued, it 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 they do not mention the review 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The PBO also notes the budget did not assess program effectiveness as promised and has since been replaced by another pledge of "cross-government program effectiveness reviews."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 would have examined "skills training and youth programming" to determine how "improvements can be made."
Last August, a Fraser Institute report said total federal spending rose 27% in fiscal year 2022/23 from 2019/20.
COVID pandemic expenditures partly increased spending to $644.2 billion in 2020/21 and $508 billion in 2021/22. However, much of the spending increase remained independent of the pandemic, "representing a permanent long-term ramping up of federal expenditure."
Federal COVID spending totalled $359.7 billion, adding $8.3 billion to present-day interest costs on the country's national debt.
Over the next decade, the total cost of wasteful COVID spending will be $111.0 billion, including $89.9 billion in wasteful spending and $21.1 billion in ongoing debt interest costs to service the debt from the wasteful spending.
As a result, the Canadian Taxpayers Federation (CTF) is not holding its breath on the federal government suddenly becoming responsible for taxpayer dues.
"The government should find savings in the bloated budget, but taxpayers shouldn't hold their breath," said Franco Terrazzano, Federal Director of the CTF. "After all, the Trudeau government hasn't met a budget target it couldn't miss."
"In 2022, spending was $470 billion. In 2023, it will be $491 billion. Spending will climb to $509 billion in 2024, $523 billion in 2025, $538 billion in 2026 and $556 billion in 2027. That's not saving money. That's massively increasing spending," he told Rebel News.
"When you increase spending by $85 billion over the next handful of years, you're saving money wrong."
Assistant Deputy Finance Minister Julie Turcotte said last month that budgetary documents are "subject to a high degree of uncertainty."
"As such, it should not be viewed as a prediction of the future," she claimed.
According to the taxpayers' group, the feds pledged $3.95 billion in savings for 2023, but total spending is up $20 billion to $490.5 billion from previous projections. "If you're spending more money, you're doing a bad job of finding savings," said Terrazzano on March 10.
The federal 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.