Conservatives seek $6 billion for unforeseen expenses
By David Akin, Canwest News ServiceMarch 23, 2010
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The federal government is asking Parliament to approve an extra $6 billion in spending this year to cover unforeseen costs associated with more than a dozen initiatives -- such as Olympic security, the H1N1 pandemic and abnormally high employment insurance claims.
And yet, even though that $6 billion will be spent on items that will not repeat next year, Treasury Board president Stockwell Day warned that Canadians shouldn't assume that government spending next year will automatically drop by $6 billion.
Instead, Day told a House of Commons committee Monday that the government expects to trim spending only by $1.3 billion over the next two years through a "strategic review" of all government spending.
For the current fiscal year, which ends on March 31, the government will spend more than $270 billion and, once all the bills are paid, will record a deficit for the year that's likely to exceed $55 billion.
Cutting spending is a key part of the government's plan to eliminate that deficit within the next five years.
But Day said it is unlikely that the $6 billion in one-time costs the government paid this year will result in a savings of $6 billion next year. He said the government expects there will be other unique "concerns and pressures" the government will have to pay for in the next budget.
Aid for victims of the earthquake in Haiti is a good example of the unexpected bills Ottawa had to pay for this year and likely will again next year, said Day. For the current fiscal year, the government spent an extra $176 million that it did not budget for on its response to the disaster.
Opposition MPs Monday said they were worried that unanticipated bills the government had to pay would become part of the permanent budgets of various departments.
"We are very concerned about the potential padding of certain budgets before a freeze so that there's a benefit there after a freeze," said Liberal MP Martha Hall Findlay.
The government has vowed that most departments will have their operating budgets frozen for the 2010-2011 budget year and that freeze will stay in place likely through 2015.
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UNPLANNED EXTRAS
- -$5.5 billion: The extra costs of providing employment insurance this year.
- -$465.3 million: Payment to Newfoundland and Labrador for loss of equalization grants.
- -$449.5 million: Forgiving a debt owed by Pakistan.
- -$196.4 million: Civil service salary increases.
- -$192 million: Extra costs associated with Old Age Security benefits.
- -$179.4 million: Funding for policing and security at the 2010 G8 and G20 summits.
- -$176.1 million: Canada's initial response to the earthquake in Haiti.
- -$110 million: Money for Atomic Energy of Canada Ltd. to help refurbish CANDU reactors.
- -$86.6 million: Funding for response to the second wave of H1N1 pandemic.
- -$83.6 million: Police and security at the Olympic and Paralympic Games.
- -$72 million: To repair the National Research Universal (NRU) reactor at Chalk River, Ont.
Source: Government of Canada
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