Trudeau government unveils plans to cut $500 million in spending

CBC.ca
Nov. 10, 2023

Prime Minister Justin Trudeau's government unveiled details of its plan to cut $500 million from government spending Thursday -- and not all departments are going to be feeling the same impacts.

While some agencies like the Canadian Space Agency and the Invest in Canada Hub will see more than one per cent of their spending frozen and returned to government coffers, 61 departments and agencies don't appear on the list of government bodies taking cuts.

The government said the cost-cutting initiative excluded agents of Parliament and small organizations with budgets under $25 million a year. But many of those not included on the list of organizations affected -- such as the Canadian Air Transport Security Authority, the Canadian Security Intelligence Service and the National Capital Commission -- have budgets much higher than $25 million.

While the government is freezing roughly 0.2 per cent of the budgets for some national museums -- like the Canadian Museum of Nature and the Canadian Museum for Human Rights -- the National Museum of Science and Technology, which spends $39.5 million a year, doesn't appear on the list of affected institutions.

Of the government departments that do appear on the list, the Department of Finance is taking the smallest hit, with only $827,000 of its $118 billion budget cut -- about 0.0007 percent of its estimates.

In the 2023 budget, released in April, Finance Minister Chrystia Freeland said promised reductions in government spending would "represent savings of $15.4 billion over the next five years."

In dollar terms, the Department of National Defence (DND) is losing the most money -- $211.1 million of the total $500 million cut. That works out to roughly 0.76 per cent of its $27.5 billion spending estimate.

The government's supplementary estimates, meanwhile, give DND an additional one-time transfer of $1.5 billion -- $500 million of it for military aid to Ukraine.

The Treasury Board acknowledged in documents that the impact of the cuts could vary from one department to another.

"Ministers and their departments were given the flexibility to reduce spending across their portfolios," the department wrote. "As a result, spending reductions may vary among portfolio organizations."

"This is just the first tranche of the results relating to our spending review," Treasury Board President Anita Anand told reporters on her way into question period.

"You are going to see additional examples of departments coming forward and it won't always, in the separate tranches, be precisely equal. But generally speaking, the exercise is for each department to take a look within their departments -- not to take all of it from operating budgets, but to look across their spend to see where savings can be had."

The government has for months touted its plan to rein in spending, trim travel costs and cut the sums spent on professional services by outside contractors. The government also has promised to reduce spending on operations and transfer payments.

On Thursday, Anand tabled supplementary estimates in the House of Commons which include a cut of $500 million to the government's $443 billion spending estimates.

In the documents made public, the government said the affected departments and organizations would not be able to spend the frozen portions of their budgets, which make up the $500 million that will lapse back to general government revenue at the end of the fiscal year in March.

Anand told reporters that $350 million of the spending cuts will affect outsourcing and contractors. Travel costs are to drop by $150 million.

The government says it wants to see spending on professional services and travel drop by $7.1 billion, and spending on operations and transfer payments drop by $7 billion, over the next five years.

Treasury Board said it worked with departments to identify sustainable spending reductions.

"Departments were asked to review programming and operations to identify where there might be duplication, lower value for money, or misalignment with government priorities," it wrote. "Proposed reductions identified through these reviews were then submitted to TBS (Treasury Board) for consideration."

Proposals that required more scrutiny were reviewed by a committee of cabinet ministers, it said.

While this round focused on external contractors and travel, further rounds will look at other types of spending, Anand said.

"You will see in future iterations of our results that there will be additional items that we will table, and then again, it won't be exactly the same across 68 departments," she said.