POLITICS

Federal Budget 2013 Will Likely Bring Deeper Cuts After 2012 Budget Axed Millions

03/19/2013 04:58 EDT | Updated 05/19/2013 05:12 EDT
OTTAWA - A year's worth of budget cuts saw dozens of federal programs eliminated in 2012, but when it comes to paring down the deficit, it's not the first cut that's the deepest.

Thursday's federal budget is unlikely to give departments any breathing room as they move on to Round Two of deficit-reduction measures, requiring them to hit a savings target twice as big as last year.

The government's ultimate goal, as laid out in last year's budget, is to see $5.2 billion in spending gone by 2014-2015.

The first year of cuts required departments to scale back around $1.47 billion; in 2013-2014 that jumps to just over $3 billion.

Treasury Board President Tony Clement characterized the first year as productive and the cuts as prudent and responsible.

"We have taken measures, both big and small, to find efficiencies and revamp decades-old programs to reflect Canadian's priorities," said Clement in an email.

But the NDP said from their perspective, the cuts seemed to have no overarching goal.

"My overall feeling is that it was done rather indiscriminately, that we've not seen any plans," said NDP finance critic Peggy Nash.

"We were told that most of these changes were back-of-the-house, central office changes and we find out afterwards that all kinds of programs and services were cut that have a direct impact on people."

How exactly the government will save $5.2 billion sparked a heated battle between the parliamentary budget officer and Conservative government, a fight that heads to court this week to determine whether the PBO has the right to know.

Only dribs and drabs of specific details have been released, some publicly, others via departmental financial statements and planning documents.

Many have been controversial, like the end of certain health-care benefits to some refugees, saving $24.2 million.

Among the big-ticket items, there was the military's decision to hold off increasing the size of the forces, thereby saving $135 million.

There were also the attention-grabbers, like the end of the penny for $11 million in annual savings and the end of a popular youth program known as Katimavik, which banked $15 million.

About 11,000 public-sector jobs are also gone, and the government says the majority were via retirement.

Grants and contributions were a prime casualty, with funding reduced or eliminated for everything from tobacco control to rehabilitating young criminals.

A program that helped develop digital Canadian content is gone. So is funding that helped Canada participate in international expos.

Statistics Canada used to survey how much the government spent on culture funding, but that study has been axed, one of almost three dozen reports either eliminated or pared back by the agency to save money.

Over at the Parole Board, officials managed to cut their travel budget by 35 per cent, they reported, by spending more time on the phone or talking via videoconferencing.

Moving more government services online was cited by a number of departments as a means to cut costs, with departments including Veterans Affairs, Canada Revenue among those reporting a shift to e-business.

But this year, the axe will start swinging with government departments required to cut over $3 billion in program spending.

Some specifics of how that will be achieved have already been reported by government agencies via their own financial statements.

For example, by the end 2014, thirteen of the world's developing economies will see the aid provided to them by Canada either reduced or eliminated entirely to save $115 million, according to the Canadian International Development Agency's quarterly financial reports.

Three prisons, including the storied Kingston Penitentiary will also close, saving the government $120 million a year.

The recently released main estimates, which give a sense of government spending next year, suggest further big changes are afoot.

But Nash said the estimates process don't allow parliamentarians and the public to know what those cuts represent.

Hopefully, some detail will emerge on Thursday, she said.

"Our expectation is that the cuts are going to be deeper," Nash said.

"All indications are this is going to be an austerity budget."

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