Budget 2023 proposes across-the-board 3 per cent spending cut for government departments
The federal budget proposes an across-the-board three per cent spending cut for all departments and agencies, a belt-tightening move after years of massive growth in the federal public service.
The proposal is one of several the Liberals say will save more than $15 billion in government spending over the next five years.
"We think there are opportunities to tighten the management of the ship," a senior government official told reporters on Tuesday inside the budget lockup. "We have seen costs go up, we have seen the size of the public service go up."
- Watch live coverage of the 2023 federal budget from 4 p.m. ET
- Capital Dispatch: Sign up for in-depth political coverage of Parliament Hill
The three per cent spending cut will be phased in by 2026-27, the government says, adding the plan will save $7 billion over four years.
Finance Minister Chrystia Freeland said the spending cuts will not include layoffs or staff reductions in the public service.
"Those savings will come from government operations, and I think that those savings are eminently attainable," Freeland told reporters on Tuesday.
Freeland added that the savings are "the right thing to do" and the government was aiming to find a balance between investing in Canadians and continuing "to be a fiscally responsible government."
"Finding that balance, I think quite appropriately, involves the government taking a look at how we do things ourselves, and doing it a little more efficiently," Freeland said.
The budget document, titled "A Made-in-Canada Plan," also says the spending reductions won't affect services.
"Reductions will not impact direct benefits and service delivery to Canadians; direct transfers to other orders of government and Indigenous communities; and the Canadian Armed Forces," the budget document says.
On top of the across-the-board cut, the government is also proposing to reduce spending on consulting, travel and other professional services by 15 per cent of planned 2023-24 spending. The government says that will bring in a savings of $7.1 billion over the next four years.
The budget also promises to work with federal Crown corporations to ensure they make comparable spending reductions. That would account for $1.3 billion in savings over four years starting in 2024-25, the budget says.
In all, the proposals represent savings of $15.4 billion over the next five years.
"We think generally across the federal public sector there are opportunities to reallocate resources," the senior government official said. "That's just good housekeeping."
The Parliamentary Budget Office has said that the size of the public service has grown by 28 per cent since the Liberals took office in 2015.
But one expert suggested cuts across the board are a simplistic approach to governing more efficiently.
"Across the board cuts is a pretty blunt instrument," said Fred O'Riordon, the national leader for tax policy at EY, who worked for more than three decades in the public service.
"It doesn't distinguish between programs that are already running efficiently and effectively and those that aren't, and it doesn't identify programs that are no longer necessary."
The head of one of the country's largest public sector unions applauded the government's decision not to cut services or jobs.
"We celebrate the government’s decision to find $7.1 billion in savings through a cap on expenditures on outsourcing and consulting fees, not at the expense of public services Canadians rely on," Jenn Carr, president of the Professional Institute of the Public Service of Canada, said in a news release.
"By capping outsourcing, the government is ensuring the quality and stability of the services we provide to Canadians."
Chris Aylward, the head of the Public Service Alliance of Canada, expressed skepticism about where the government will find the money for the planned savings.
"They are unable to explain exactly where they're going to get these savings from. So we're very concerned about that, we're concerned about potential job loss as a result of this budget," he told CTV News. "This budget screams austerity."
The budget also proposes to reduce previously announced fuynding that is no longer required or remains unallocated, or delay it where it's being spent slower than first envisioned. That will lead to savings of $6.4 billion over six years, the budget reads.A reporter reads a copy of the Federal Budget in the lockup for the Federal budget, Tuesday, March 28, 2023 in Ottawa. (Adrian Wyld/THE CANADIAN PRESS)
GOVERNMENT PROGRAMS TO BE REVIEWED
The budget also announces new "cross-government program effectiveness reviews," the first of which will focus on skills training and youth programming.
"The first review will examine skills training and youth programming, to determine, by Budget 2024, whether improvements can be made to help more Canadians develop the skills and receive the work experience they need to have successful careers," the budget says.
Treasury Board President Mona Fortier, whose department oversees the management of the public service, will lead these reviews.
O'Riordon said he would prefer a more complete program review, rather than a piecemeal approach that focuses at first on one thing.
"My preference would be a more comprehensive program review and deeper cuts where they're justified with a reallocation of resources—or resources savings—and leaving effective, efficient programs whole."
MORE FUNDS FOR PHOENIX PAY SYSTEM
The budget allocates more than $1.3 billion in money to deal with ongoing pay issues for public servants. That money is for the problem-plagued Phoenix pay system, which continues to face issues years after it was implemented.
The budget sets aside $517 million in the coming fiscal year and $521 million in 2024-25 for Public Services and Procurement Canada to "maintain pay system resources as the government continues its work to resolve public service pay issues."
The system has cost the government hundreds of millions of dollars and led to pay nightmares for tens of thousands of public servants.
The budget also allocates $52 million to "improving the government's pay administration" for the coming fiscal year.
That money will go toward Shared Services Canada as it continues to work on a "potential next-generation pay solution."
MONEY FOR DIVERSE, INCLUSIVE PUBLIC SERVICE
The budget also promises a new $45.9 million mental health fund for Black public servants.
"All too often, Black public servants face barriers to career advancement and lack adequate support for the challenges they face—particularly for their mental health," the budget document says.
The $45.9 million would be spread over three years and also fund new dedicated career development programs, including to prepare Black public service leaders for executive positions.
A group of current and former Black public servants have filed a class-action lawsuit against the federal government, saying systemic discrimination negatively affected their careers, including being denied job advancement.
The government is also proposing $6.9 million over two years to advance a "restorative engagement program" that would empower employees who have suffered harassment and discrimination, and to "drive cultural change in the public service."
The funding will also go toward a review of the processes for addressing harassment, violence and discrimination complaints.
CTVNews.ca Top Stories
Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Stormy Daniels describes meeting Trump during occasionally graphic testimony in hush money trial
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
U.S. paused bomb shipment to Israel to signal concerns over Rafah invasion, official says
The U.S. paused a shipment of bombs to Israel last week over concerns that Israel was approaching a decision on launching a full-scale assault on the southern Gaza city of Rafah against the wishes of the U.S.
Former homicide detective explains how police will investigate shooting outside Drake's Bridle Path mansion
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
Northern Ont. woman makes 'eggstraordinary' find
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
Susan Buckner, who played spirited cheerleader Patty Simcox in 'Grease,' dead at 72
Susan Buckner, best known for playing peppy Rydell High School cheerleader Patty Simcox in the 1978 classic movie musical 'Grease,' has died. She was 72.
Jeremy Skibicki has 'uphill battle' to prove he's not criminally responsible in Winnipeg killings: legal analysts
Accused killer Jeremy Skibicki could have a challenging time convincing a judge that he is not criminally responsible for the deaths of four Indigenous women, a legal analyst says.
Bye-bye bag fee: Calgary repeals single-use bylaw
A Calgary bylaw requiring businesses to charge a minimum bag fee and only provide single-use items when requested has officially been tossed.
Alcohol believed to be a factor in boating incident after 2 men die: N.S. RCMP
Two Nova Scotia men are dead after a boat they were travelling in sank in the Annapolis River in Granville Centre, N.S., on Monday.