Inkless Wells

Inkless Wells

Paul Wells on all the latest out of Ottawa—along with the occasional post about jazz. Follow Paul on Twitter: @InklessPW
He also offers his thoughtful perspective of Stephen Harper’s last 10 years in his recent eBook, The Harper Decade.

Flaherty explains that extra $11 billion

by Paul Wells on Friday, April 8, 2011 9:39pm - 169 Comments

As Aaron point out, the Conservative platform released today contains $1 billion in the first year, rising to $4 billion in the third and fourth years, that weren’t in the budget only 17 days ago. That’s a cumulative $11 billion in extra fiscal room to pay for all the Conservatives’ promises. It turns out that money comes from a “comprehensive Strategic and Operating Review.” That review was mentioned in the budget, but Jim Flaherty didn’t book a dime of savings from it because the review hasn’t been done yet.

Now it’s the basis for all new promised Conservative spending. Now here’s the thing: the Conservatives have already undergone a strategic review, and the results are included in the pre-election budget. This is money the Conservatives have already decided to cut. The savings come to $194.5 million for 2011-12, $796.4 million for 2012-13, and $1.57 billion for 2013-2014. (Most of those savings come from slowing growth in military spending, $525 million below the original budget in 2012-13 and 1 billion in the year after.)

So that means the Conservatives have already cut about $200 million this year, $270 million next year and $570 million the year after, using techniques that they hope will land them up to seven times as much savings in a year, not far down the road.

Wow. What have they been cutting?

I couldn’t get any explanation for that at the budget lockup. The descriptions of the cuts in the budget are perfectly opaque — $14 million at the Atlantic Canada Opportunities Agency for “Improving use of internal resources,” $16 million at Quebec Economic Development for “aligning funding with program demand,” and a whopping $190 million at Human Resources for “Improving alignment of program funding with actual needs.”

When I went to the civil servants who were locked in with reporters and copies of the budget to ask, they had no explanation for any of these cuts. “The departments have been informed of the results of the strategic review today,” one official told me. “You’ll have to ask them.”

And then the government fell, and now the departments can’t talk, and the Conservatives tell us they can find $11 billion in savings just like the couple of billion they just found.

Suddenly I needed a much better explanation for the cuts they’ve already announced. The Conservative war room put Jim Flaherty on the phone. Here’s our entire conversation. I informed Flaherty’s press secretary that I would be posting this interview online. It lasts about 10 minutes.

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  • Loraine Lamontagne

    Weak leadership, from both Conservative and Liberal leaders. We have the leaders we deserve… Where are the strong, star candidates? A strong leader will attract, and impose if need be, highly qualified candidates in ridings. Best example would be Marcel Massé who was parachuted by Chrétien as a candidate in Hull-Aylmer for the 1993 election and eventually acted as Minister of Intergovernmental Affairs, President of the Queen's Privy Council for Canada, Minister responsible for Public Service Renewal, President of the Treasury Board and Minister responsible for Infrastructure. He presided over one of those exercises, the Program Review, which led to the only shrinking of government (1 of 6 government positions in the public service, or 50,000 jobs) in Canada's history.

    Mr. Massé was a highly qualified and experienced manager of governments, provincial and federal, under different parties, and a former clerk of the privy council under Clark. Read his bio – http://clerk.gc.ca/eng/bio.asp?id=21

    Our problem now is that neither Harper nor Ignatieff are bringing in people of that caliber. (Dion did) It's fine to say we'll do a strategic review, it's another to do it successfully. Chrétien, with Massé, did it. Those with a real, non-partisan interest in the matter should read the paper prepared by Jocelyne Bourgon, clerk of the privy council during the Chrétien years, which details how this was done.
    http://www.instituteforgovernment.org.uk/news/art…

  • John

    Uhhhh, this is effing scary. These guys are playing a dangerous, dangerous game here.

    After this interview, I have zero confidence in what is going on in Ottawa. How could he not have a single coherent answer for Paul's questions?

    • http://halooverride.blogspot.com/ Halo_Override

      Practice, practice, practice.

  • waynebernard

    In Mr. Flaherty's previous five budgets, his estimates of both debt and deficit have been well removed from reality. In fact, here's what he said in his second budget:

    "To complement the goal of eliminating the country’s net debt, the Government will publish a comprehensive fiscal sustainability and intergenerational report with the 2007 Economic and Fiscal Update. The report will provide a broad analysis of current and future demographic changes and the implication of these changes for Canada’s long-run economic and fiscal outlook. The publication of a report on fiscal sustainability is motivated by the Government’s view that maintaining sustainable public finances at all orders of government is a critical condition to achieving intergenerational equity and strong and sustained economic growth."

    Here's what Mr. Flaherty promised Canadians in the rest of his budgets:

    http://viableopposition.blogspot.com/2011/03/harp…

  • Leo

    Good find, thx.

    The publication "Public Service Reductions in the 1990s: Background and Lessons Learned" also talks about what the layoffs did to the moral in the civil service. They don't want to repeat those mistakes.

    • http://halooverride.blogspot.com/ Halo_Override

      I certainly agree that the Harper Government™ has found new and different ways to erode morale in the civil service.

  • BCVoiceOfReason

    A Majority government definitely has the ability to make the spending cuts required in the first 2 years of a 4 year mandate.

    A minority or coalition is not able to cut spending.. Every minor cut (Kairos for example) becomes a battle ground.

    Without looking too deep – Human Rights tribunals and CBC would have well over 1B in government funding.

    I certainly could rather watch my hockey on TSN and take advantage of the TFSA. It is like Mr. Ignatieff says all about choices.

  • Patchouli

    Now we have some meat to sink our teeth into! I was beginning to think the entire campaign would be of journos asking harper about Carson, question-rationing, or just seeing steve and laureen watching kids dance, kick and play piano.

    Harper is soft on numbers. Harper makes it up as he goes along. Now we can have a discussion worthy of an election.

  • chet

    Mr. Wells here joins the "dissection" of Flaherty's numbers in his post above.

    A magnifying glass to the right and a blind eye to the left.

    It appears the media isn't even trying to hide their allegiances. Iggy rolls out a bunch of fantasy numbers and the media parrots the promises. No "dissection" there.

    Iggy's goons rough up reporters and shove a pregnant womant at a rally and barely a whisper.

    They unanimously proclaim he had a "good week" while he flanks on stage his candidate charged with a criminal offence (Rodrigues), supports a candidate who defends "the correct" form of rape, and has one who would be in his government as founder of a white supremist party. (Iggy denounces his past statements, but why no word on his being the founder…particularly since it was well known).

    • http://halooverride.blogspot.com/ Halo_Override

      Your first sentence is accurate. You should have stopped there if you want to get into Heaven.

    • TimesArrow

      "Iggy's goons rough up reporters and shove a pregnant womant at a rally and barely a whisper"

      Lying troll.

  • chet

    While the media pounds away at a FORMER staff member (Carson) these other current membership issues for Iggy are swept under the rug. A brief mention, then non of the follow up as to how Iggy could have let in a white supremist, why is Iggy standing shoulder to shoulder with a man who stands charged for a crime.

    The reality is the media is wholly uncurious with regards to Iggy's failings and literally rapid about Harper's.

    I our local paper, the fact that a couple of people were ejected from a Harper rally was in THE FRONT PAGE HEADLINE, that is, depicted as, not only the most important political news of the day, but THE most important fact for all to know. The next day Iggy's white supremist candidate story was a tiny blub about twenty pages in, never to be mentioned again.

    The corruption scandal of our generation.

    • http://halooverride.blogspot.com/ Halo_Override

      "Former" because he had to be fired. "Had to be fired" because he was caught by journalists. "Caught by journalists" because the PMO didn't bother vetting him. "Didn't bother vetting him" because, well, there's only one man with the answer to that question, and he doesn't like to talk to reporters.

  • Leo

    What I like about Flaherty is his group of private sector CEO's, Board Members, etc. – most of whom are prominent business leaders – to seek advice on the federal budget and the economy.

    James A. Pattison, CEO, Jim Pattison Group.
    Paul Desmarais Jr., co-CEO, Power Corporation of Canada.
    Geoff Beattie, deputy chairman, Thomson Reuters.
    James D. Irving, president of J.D. Irving Ltd.
    George Gosbee, CEO, Tristone Capital Inc.
    Isabelle Hudon, president, Marketel.
    Mike Lazaridis, founder and co-CEO, Research In Motion
    Jack Mintz, former CEO, C.D. Howe Institute.
    Ajit Someshwar, CEO, CSI Consulting Inc.
    Annette Verschuren, division president, Home Depot Canada.
    Carole Taylor, former B.C. finance minister.

    • http://halooverride.blogspot.com/ Halo_Override

      Ooh, are we doing support lists now? Because I'd love to start talking about the census again!

    • Loraine Lamontagne

      But does he listen? How many of those I wonder approved of the GST cuts.

  • Scottish Terror

    Flim Flam Flaherty in action again. He should go back to ambulance chasing.

  • NorthernPoV

    I think the promises for the distant future were cooked up by the frat-kids in the war room as part of the stable-majority-gov't theme. ie Convince the somnolent public that his transcendence to ultimate power is a given.
    Instead they've turned into a silly boat anchor along with most of their worn-out, too-clever-by-half focus-group and poll-tested tactics.
    Prime Minister Ignatieff – sounds pretty good.
    Lets make it happen.

    • Patchouli

      Morning, NPOV. I joined the executive of my local Liberal riding association and I'm working my butt off to put my time and effort where my mouth usually is.

      I encourage you and everyone here to find a candidate you support and get out and help. It's actually quite fun and satisfying.

  • BCer in Mtl

    Maybe Jim's just seen too many of those UFile adevrts, and thinks he'll find those billions in an old jacket pocket? I would like to see him dance though.

  • Amateur Hour

    "And then the government fell, and now the departments can’t talk, and the Conservatives tell us they can find $11 billion in savings just like the couple of billion they just found."

    They're lying about costs, revenue, spending and deficits. Straight up making things up. Those who could provide specifics are unaware of the cuts being claimed and cannot speak to the media during the campaign. On top of this, there's little in the recent CPC budget proposal that speaks to post-2014 healthcare, $140+ billion infrastructure deficit, $190+ billion needed to modernize the energy grid, etc.

    Thank you for reporting on the current Government's financial fictions.

  • KRB

    The gov't was ahead $5 billion of forecast in the fiscal year just past. It's not that hard to imagine finding $11 billion over 4 years, is it?

    If you want to find it, it can surely be done.

  • PeteTong

    In my public sector experience, managing expenditure reductions through attrition is quite effective. Most civil servants who occupy junior positions and who are on the verge of retirement are usually the most useless. In the private sector their position would have been eliminated decades ago, but in the public sector the government waits until the person retires.

  • LdKitchenersOwn

    I can't believe I didn't think of this yesterday, but I think I just realized where this $11 billion magically came from.

    I'm pretty sure it involves Minister Flaherty, a rainbow, and large amounts of gold…

  • DeNuS

    Odd the way Jim and his pal Stephen talk about a few billion here and toss a billion there. They never address the huge debt of 62% debt to GDP ratio. The CIA website shows the total Federal debt of $606 Billion dollars. ( factbook/geos/ca.html ) That adds up to a lot of interest being paid out to foreign countries every year.

    I am not a fan of Paul Martin however he did state each year how much money we set aside to pay down the debt. Jim do you understand how an economy has a problem when facing such a massive debt?

  • syl

    Flahetry and Harper are trying to do to Canada what Flaherty and Harris did to Ontario.
    It is time to get rid of the conservatives

  • Jean-Marc

    Thanks for that interview. My lasting impression is about how hard the man works and how hard work it must be to have to do this governing stuff. Thanks again and I will indeed stop shaking my head soon.

  • B. SummerHaze

    Every time elections come around ,the liberals , conservitives and the NDP promise to pay down the devisit and the expenditures exceed even more. To many promises. Were is the integrity and when will the time come when politicians start thinking of the country they serve and not the fat benifits they will get later down the road. I am tired of listening to all this Bull S*** . How about the ordinary citizen who has worked all their lives to retire and become one of many Canadians who will live under the poverty line. CEO's earn millions of dollars and it comes out of the pockets of Canadians . And to many government payouts. If all Canadians said, "enough is enough " Decline their vote just maybe , the leaders might realize they can not fool the people anymore with their bull crap. .
    Feul should be controlled by government , as high costs creates a dominoes affect on the economy.
    I'm fid up with unnecessary spending ,and we have know one to make it better.

    Bert SummerHaze. – U.E.L.

  • gar

    Gosh imagine the journalist found it difficult to understand. Now there is a bunch of mathematical genius to be explaining budgets to the Canadian people. They find it difficult to write on anything without their personal bias showing on the left or right. Like the talking heads on TV if brilliance was a blessing that bunch is headed to hell.They always remind me of one who played a certain sport in high school,then when the games are on try and baffle you with their knowledge.

  • ABHarperRegime

    -$Millions wasted on partisan advertising and Economic Action Plan signage.

    -The biggest spending finance minister in Canadian history.

    -Authoritarian style government Muzzling dissent and stifling free speech.

    -A PM who vowed to "never appoint an unelected senator" who now cant appoint them fast enough.

    -A government who campaigned on accountability & ethics now causing an un-necessary election in 2011 for being found in contempt of Parliament for the first time in CDN history.

    -$Billions to help the Americans control our border & sovereignty.

    -Attack the PBO Kevin Page for doing his job.

    -More $Billions in profits for large corporations, banks & dirty oil. ZERO for health care, day care, pharmacare, retirement, etc.

    -Kill gun control.

    -The largest deficit in CDN history.

    Did I miss anything?, oh that's right its all hidden from both the opposition & the CDN public. get out & VOTE!.

    • Blue

      Is that you tedbetts ?

  • LaxAtlDfwYow

    Kudos to Inkless for hunting Flaherty down.

    Jim's a decent salesman but even the best struggle when offering vapourware. I'd summarize his argument as: it's just a matter of scale, we've already found a few hundred million so, while it will be somewhat more difficult to find an order of magnitude greater savings, there is no reason to think we won't. Trust me.

    Probably as good a defense as he can muster, but not very credible.

    Back in the day, I'd have termed it "hoping to find a horseshoe in his ass."

  • OriginalEmily1

    Well Paul, you've been told it took a LOT of discussion, and a LOT of work, and while they'll be more 'aggressive' in future, they wouldn't dream of doing what the Liberals did because that was draconian….

    Blabetty blab, blibbity blib…..bottom line here is that they 'think' a lot of boomers will be retiring this year….

  • Anon

    In the debates, Harper will announce the deficits will be gone by 2013, and by the end of the campaign, he will tell people that the deficit already gone.

  • LdKitchenersOwn

    What deficit?

  • David_M.

    Well Good thing we have a treasury board pres we can ask..

  • WaterlooAl

    What recession?

  • Fred Moro

    What election?

  • BCVoiceOfReason

    There was a question by Liberal MP. McGuinty: " When have the Conservatives ever been ahead of their deficit estimates?"

    Answer: Fiscal 2010 $9 B less deficit than budgeted.

    I can't believe that the press lets those kind of statements go unchallenged.

  • http://halooverride.blogspot.com/ Halo_Override

    What people?

From Macleans