POLITICS

Federal cuts threaten recovery, Liberal McCallum says

09/12/2011 04:00 EDT | Updated 11/12/2011 05:12 EST

The government is endangering the economy by cutting public service jobs over the next few years, Liberal MP John McCallum said Monday.

McCallum, a former chief economist for RBC, said it's a bad idea to cut public sector jobs when the private sector is shedding workers and there is danger of a global recession.

“In principle, we Liberals are not opposed to expenditure review or cuts,” he said.

“We did it in the mid-'90s, we did it in 2005. But it has to be done at the right time. And at a time when the economy around the whole world is at risk of another financial crisis or going into recession, that is not the time to do these cuts.”

"They're aiming for $4 billion per year in expenditure reductions. I’m saying that in the coming year, that is not the time because we are really at risk of a much weaker economy. Now, if the economy recovers 12 months from now, then maybe they could delay those cuts by a year and bring them in the following year. But we would have to see how things go," McCallum added.

A spokeswoman for Treasury Board President Tony Clement said the government plans to identify and eliminate unnecessary spending, not cut jobs.

"As always, we will be responsible in our decisions, which is precisely why we are taking the reasonable approach we are," Heather Hume said in a statement, noting that health, education and pension transfer payments to the provinces and territories are exempt from the program review meant to cut spending.

McCallum said the government should also be careful about where it cuts, warning some of the announced measures could endanger public health and safety. He pointed to downloading meat inspection to the provinces and closing weather stations in Newfoundland and Labrador.