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Stealth Cuts and Omnibus Bills are no Friends of Democracy

Ottawa Citizen - November 22, 2014
Nationalnewswatch - November 26, 2014
Charlottetown Guardian - November 28, 2014
Victoria Times-Colonist - November 30, 2014
Halifax Chronicle Herald - December 1, 2014
Huffington Post - December 2, 2014
Trilateral Commission "In the News"


By Colin Kenny

The Harper government has made no secret of its intention to tighten Canada’s fiscal belt over the last several years.

Since 2010, the prime minister has been working to downsize the budgets of most federal agencies by between 5 and 10 percent as part of his Deficit Reduction Action Plan (DRAP). In some cases, such as with the RCMP, the cuts have been as severe as 15 percent.

But DRAP is only part of the picture. A stealth campaign of additional budget cutting is afoot in Ottawa, occurring under the radar of most Canadians.

It involves federal organizations grossly underspending their close to the bone budgets without providing any explanation to taxpayers.

In 2013-14, $7.1 billion in approved funding went unspent across government. The figure was $10.1 billion the previous year.

These “lapsed funds,” as the government calls them, result in diminished programs and services for the Canadian people.

Don’t get me wrong, finding ways to save money and operate more efficiently should be necessary pursuits for any government, especially in a deficit situation. But it’s essential that these activities be carried out in a transparent manner.

Each year, before approving public spending, the citizens’ representatives in Parliament get to know what the government is planning to spend money on. The government is supposed to present this information in a document called the Main Estimates, as well as in the Supplemental Estimates.

When a government underspends to the extent we are seeing with the Harper government, the estimates become unreliable. Parliamentarians aren’t able to find out how much the government is actually spending until months after the end of the fiscal year. As a result, they can’t inform the public about what programs and services have been diminished in time to make a difference.

The way the underspending scheme stifles debate reminds me of the Harper government’s omnibus legislation, except it’s even worse. Even after the prime minister invoked time allocation, parliamentarians were at least afforded some opportunity to discuss the massive omnibus bills. But with underspending, Canada’s representatives don’t get any time to debate the measures at all. Nor do they get a chance to ask officials enough tough questions about the impact of the cuts. This undermines our democracy.

Equally disconcerting about the scheme is how widespread it is, impacting departments across the board. Astonishingly, even officials in the national security sphere are guilty of underspending their budgets at a time when they are being asked to do more to stop terrorism.

Despite their previously mentioned budget woes, the Mounties only spent approximately $2.9 billion of their $3.1 billion 2013-2014 budget, resulting in $165.3 million in unspent funds.

The Department of National Defence also underspent its nearly $20 billion budget by just shy of a billion dollars. This is a colossal sum to not spend, especially when military experts say the money earmarked for replacing our old frigates and destroyers appears increasingly inadequate.

It’s the same story with the Canadian Security Intelligence Service and the Canadian Border Services Agency, which underspent their budgets by $18.4 million and $338.1 million, respectively.

Have the officials running these organizations suddenly become inept at management or have they all been persuaded by the prime minister that spending even less than Parliament has authorized is good for Canada?

Since 2011, the Harper government has linked the payment of bonuses for deputy ministers to how successfully they advance the government’s cost-cutting goals. Up to 40 percent of a deputy minister’s total annual pay is in the form of bonuses. This could be a whopping $126,000 in bonus pay for the top executives.

With Harper dangling that fat carrot in front of them, the mandarins have taken to the task with zeal. Between 2010 and 2012, the total annual amount of money spent on bonuses in the Public Service jumped from $4.4 million to just under $5 million.

In addition to executing the cuts, some senior bureaucrats are acting like snake oil salesmen when selling the diminished programs and services to Canadians. The louder they shout, “we’re ok, we can manage with the money we have,” the fatter their bonus is likely to be.

The Harper government is in reality engaged in two rounds of cuts. The first is publicly acknowledged while the second is being carried out in stealth, hidden from Canadians.

And at the risk of tinkering with that old Cat Stevens tune, the second cut is the deepest.

[Colin Kenny is former chair of the Senate Committee on National Security and Defence.]