POLITICS
06/13/2011 01:12 EDT | Updated 08/13/2011 05:12 EDT

Kevin Page, Budget Officer, Says Small Government Not Enough To Meet Tory Savings Plan

CP

THE CANADIAN PRESS -- OTTAWA - The parliamentary budget officer says shrinking the bureaucracy isn't enough to meet the Harper government's savings goals.

The latest report from Kevin Page raises questions about the Conservative plan for big savings through a smaller public service.

But it now appears attrition alone won't do the trick. Government spending plans tabled last week in Parliament show the feds expect 6,000 full-time jobs to come off the books by 2014, bringing down the bureaucracy to 365,000 positions.

Page's officials, however, found those losses alone would only get the government a third of the way to its goal of saving $1.8 billion a year.

Finance Minister Jim Flaherty's 2010 budget froze operating budgets with an eye to saving that much.

And yet the latest spending plans show spending on the public service will actually go up.

Spending on personnel is set to increase by $1.7 billion to more than $38 billion. Meanwhile, spending on overhead -- such as human resources, IT and financial services -- is expected to grow by $235 million to almost $10 billion this year.

That baffled the budget watchdog.

"We can't square the numbers," Page said in an interview.

Debt payments are the biggest spending increase. That's to be expected as the government winds down the Economic Action Plan, its multibillion-dollar stimulus program.

But Page's report red flagged cuts to the maintenance and repair budget. The government expects to save $560 million this year on capital expenditures.

"Are we trying to achieve operational restraint by cutting repair and maintenance?" Page said.

"I was just saying to somebody just minutes ago, I was on top of my roof this weekend looking at my chimney, because I've got some stones that are loose ... you have to do these repairs. Otherwise, you're just deferring bigger pressures.

"It may look easy at first glance to cut back on repairs and maintenance on materials and supplies, but in the long run, you're going to have to put the money back in."

There will also be deep cuts to government-owned Atomic Energy of Canada Ltd. The Conservatives are selling the troubled Crown corporation's nuclear reactor business.

Page released his report Monday as MPs prepared to vote on the reintroduced Conservative budget.

He writes in the report that MPs might want to question the "assumptions and reasonableness" of the government's spending plan.

"Greater scrutiny may be warranted regarding the forecast growth in internal service costs (i.e. overhead), personnel expenses and staff numbers," the report says.

"All will need to be carefully managed to achieve the government's operating expenditure savings targets."