Budget watchdog slams federal cuts plan

Canada's parliamentary budget watchdog is casting doubt on the Conservative government's plan for cutting the size of federal bureaucracy.

Canada's parliamentary budget watchdog is casting doubt on the Conservative government's plan for cutting the size of federal bureaucracy.

Parliamentary budget officer Kevin Page says there is limited evidence that plans by federal departments will meet the government's attrition plans for the public service. ((Adrian Wyld/Canadian Press))
Parliamentary budget officer Kevin Page said Thursday there is limited evidence that the current plans of federal departments will meet the government's attrition plans for the public service.

"We don't see how it comes together," Page told CBC News in an interview on Thursday in Ottawa. "We don't see the math."

As part of its deficit elimination program, the government has promised to contain the size of the federal bureaucracy that has grown by a record 14 per cent since the Conservatives came to office five years ago.

The latest Conservative budget projections call for $6.8 billion in cuts to federal programs over the next five years, including annual attrition of about 11,000 public service jobs.

But Page's report found that planned staff cuts would be offset by an expected increase of more than 4,000 jobs at Correctional Services Canada, leading to an overall reduction of just 1,000 full-time positions in the medium term for all 10 departments. 

Based on those numbers, the report finds "limited evidence" that the government's current plans will meet the Treasury Board’s public service attrition target.

"Over three years, we see a reduction of 1,000," Page said. "It's not squaring."

Page's office expected to find out how 10 departments that had reported expected employment reductions were going to maintain service levels with fewer staff.

But his office found that only one department — Human Resources and Skills Development Canada — actually had a plan to do so, while RCMP and Correctional Service Canada did not respond to Page's requests.

Page's report also suggests parliamentarians may want to call deputy ministers before committee to explain their departments' plans, particularly "the two agencies [the RCMP and Correctional Services Canada] that did not respond to the PBO request, yet report significant planned changes in their staffing levels."

Reductions 'on track': Day

Treasury Board president Stockwell Day says public service retirements are only one part of the government's plan to reduce the size of the federal government. ((Adrian Wyld/Canadian Press))
 In a statement responding to Page's report on Thursday, Treasury Board President Stockwell Day insisted the government's "clear plan" to balance the budget is "on track." 

Day said about 13,000 people are projected to leave the core public service in the current 2010-11 fiscal year — up from the 11,134 who left last year.

"We will not be balancing the budget on the backs of hard-working taxpayers like the Liberals did in the 1990s," Day said.

But he said retirements and attrition are "just one part" of the government's plan. 

"Over the next few years, those factors will provide departments with some flexibility to manage the size of their workforce," Day said.

Deficit projections questioned

In a separate report released Thursday, Page again questioned whether the Conservatives will be able to eliminate the deficit and have a surplus in five years, showing even the International Monetary Fund believes the goal will not be met.

While Finance Minister Jim Flaherty predicts Ottawa will have a $2.6-billion surplus in 2015-16, Page predicts the federal government will record an $11-billion deficit that year. Meanwhile, the IMF projects Ottawa will have a deficit of about $5.4 billion.

The opposition parties immediately seized on Page's report, saying his numbers — and not Flaherty's — should be trusted.

Liberal House Leader David McGuinty said the findings shred Prime Minister Stephen Harper's claim of being a good economic steward.

"An independent voice in Parliament is saying, 'Just a second here, we can’t believe these numbers,'" McGuinty told CBC News.

Flaherty, in turn, said Page "should read the IMF report," which the finance minister said supports the government’s plan to return to balanced budgets as both "credible" and "appropriate."

"While Kevin Page is far more pessimistic than the IMF now, his opinion tends to change frequently," Flaherty said in a statement.

Page also said his office was forced to prepare the report with very little information, because when his department requested details regarding how the planned operating budget freeze would be achieved, the government indicated that the information is a matter of cabinet confidence and would not be released to the public.

NDP Deputy Leader Thomas Mulcair defended Page against what he said is the government's constant attempts to undermine the credibility of the watchdog they introduced.

"Every time Kevin Page has made an analysis or a prediction he’s been proven right," Mulcair told CBC News on Thursday. "Every time the Conservatives contradict him, they’ve been proven wrong."

Page's office also cited the federal website from the previous Liberal and current Conservative government that contained planning information to parliamentarians and Canadians on departmental restraint in 2005 and 2006 — but is now deemed a matter of cabinet confidence by the government.

But a spokesman for the Treasury Board said that website displayed results, not planning information, and that the government has reported on the results of strategic reviews every year in the budget on the Treasury Board's website  since 2008. 

Page was appointed by Harper with a mandate to ensure truth in government budgeting and expenditure proposals as part of the Federal Accountability Act.

With files from Julie Van Dusen and The Canadian Press