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In Depth

The 39th Parliament

How Tory government found $1 billion in savings

Last Updated September 26, 2006

Treasury Board president John Baird
will cut $1 billion from government
spending.
(CBC)

It wasn't conventional penny pinching by any standard. With an annual program spending budget of $189 billion, Treasury Board Secretary John Baird decided to look into a lot of places to find $1 billion in savings.

In all, 66 programs were cut or trimmed back in a series of cuts announced September 2006 that hit across many departments and agencies. The cuts will affect adult literacy programs, tourists, policy research and efforts to fight the pine beetle infestation. And it's just the beginning, as Baird says he will look for another $1 billion in savings.

"We have uncovered numerous examples of waste and duplication," Finance Minister Jim Flaherty said in announcing the cuts, while also heralding a budget surplus of $13.2 billion.

The government found areas to make big cuts, for example, the $78.8 million in GST rebates to tourists. Said Mr. Flaherty, "We won't apologize for our capacity to say no to bad ideas."

Four areas

The government says it will look for $1 billion in savings over two years by targeting four areas:

  • Programs that didn't spend all the money allocated: $379.5 million
  • Programs that are not delivering value for money: $265 million
  • Work that could be done more efficiently outside the government: $256 million
  • Programs that don't meet the needs of Canadians: $99.6 million
But aside from the big items, just how far do these cuts extend? A glance at a few items on the list opens up an interesting view of government spending.

A lot of little cuts

More than half of the cuts — 37 in total — will each save the government $10 million or less. Added together, slashing or streamlining these small program will hand the government $160 million and savings and includes eliminating the Court Challenges Program, consolidating foreign missions and getting rid of the RCMP's drug impairment training budget.

Cuts by government agency
Human Resources $152.8 million
Industry $145.3 million
Treasury Board $130.8 million
Revenue/Border Services $80.2 million
Public Safety $74.6 million
Foreign Affairs/Trade $64.6 million
Health $62.4 million
Indian Affairs $53.6 million
Various $46.8 million
Regional funding $39.3 million
Canadian Heritage $33.1 million
Citizenship and Immigration $20.3 million
Agriculture and Agri-Food $20 million
Fisheries and Oceans $20 million
Natural Resources $16.2 million
National Defence $13.9 million
Environment $10.5 million
Finance $5 million
Justice $4.2 million
CIDA $4 million
Transport $3.5 million

At the bottom of the list is a relatively meagre savings of $300,000, labelled as "Efficiencies Related to Policy Research Initiative." The program, which was created in 1996 to "better understand" policy research issues, has a mandate to research five policy areas, including an aging population, approaches to addressing poverty and sustainable development. .

In the arts, the government will cut its assistance to museums by $4.6 million over two years. According to the museum assistance program's website, more than 417 projects got funding from 2003 to 2005 to the tune of almost $18 million. The money has gone to exhibits in big and small museums. For example, the $3,000 given to the Kelowna Art Gallery Association for a Sea to Sky landscape exhibit, or $16,500 given to the McMichael Canadian Art Collection for Group of Seven drawings.

Overseas, the government plans to consolidate Canadian missions for a total savings of $4.2 million. Canada currently operates 172 missions in 111 countries, where they process visitor permits, issue passports and work with trade service requests.

High-profile cuts

GST rebate, $78.8 million
The government will eliminate the rebate that it offers foreign tourists. The Canadian Revenue Agency says that only about 3 per cent of visitors apply for the rebate, but critics said the cut will hurt tourism, particularly among Americans who cross the border.

Medical marijuana, $4 million
In announcing the cuts to medical marijuana research, the government says it doesn't believe it should tell researchers what to study. In its election platform, the Conservatives said they would prevent the decriminalization of the drug.

Legal programs
The Court Challenges Program ($5.6 million) was used to help provide money for special interest groups to challenge government laws, with a focus on language and equality rights. Baird questioned why the government should "subsidize" lawyers to challenge laws. The Law Commission, which was set up to advise the Parliament on how to modernize laws, will be eliminated after its $4.2 million in funding is pulled.

Fighting the pine beetle, $11.7 million
The government says it will cut unused funding that was set aside to fight the mountain pine beetle. The move comes just days after a government report said the infestation, which has destroyed millions of hectares of lodgepole pine in B.C., is spreading. Baird says the funding is from a Liberal program and that the government will launch its own approach.

Workplace and literacy
Overall, Human Resources and Skills Development faced the biggest cut, totalling $153 million. About $18 million will be slashed from adult literacy programs, $55.4 million from youth employment and $17.6 million from a program to boost work skills.

Status of Women Canada, $5 million
This agency, established under prime minister Pierre Trudeau in the early 1970s, funds groups, research and seeks gender equity with its $23 million annual budget. Conservative supporters have urged the government to axe the agency. The $5 million cut to the agency in Baird's announcement was described as "administrative savings."

A smaller cabinet, $46.8 million
A good portion of the savings, Baird says, will come from having a smaller cabinet. Harper's cabinet, named in early 2006, was made up of 27 members, compared with the 39 ministers of former Liberal prime Minister Paul Martin's cabinet.


By the numbers

$188.8 billion: The amount of government spending for fiscal 2006-07

$1 billion: The amount the Treasury Board wants to save over two years

$26 billion: The amount in taxes the Harper government cut in the May 2006 budget

66: Number of programs that will be affected by the cuts

$83.2 million: The biggest cut in the plan for a reduction in excess funding for Public Service Human Resource Programs

$300,000: The smallest cut in the plan, for "efficiencies" related to Policy Research Initiative

37: Out of the 66 cuts, how many programs cost less than $10 million

21: The number of government agencies affected

Five costly items cut: Eliminating GST rebate for tourists ($78.8 million); youth employment investments ($55.4-million); reduction in cabinet ($46.7 million); non-committed funding for social programs ($39.2 million); adult literacy program ($17.7 million)

Five inexpensive items cut: Reducing assistance to museums ($4.6 million); medical marijuana research program ($4 million); cutting foreign policy research and outreach ($1.3 million); reducing advisory groups ($1 million); corporate management and program efficiencies ($466,000)

A full link to all the programs that were cut are available here.

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