2010 Budget - Let the Hand Wringing Begin...

[GAP]

Here's What We Can Expect
John Ivison, National Post  Published: Saturday, February 27, 2010
Article Link

Two months after MPs last met on Parliament Hill, the House of Commons will once again echo to the characteristic sounds of Question Period next week -- the opposition asking fatuous questions and the government not answering them.

First, though, we have the pomp and ceremony of the Governor-General reading the Speech from the Throne on Wednesday and a budget the following day. What can we expect? What will be the thrust of the government's new agenda? Who will take the Opposition leader's chair -- the lion who roared into the chamber at the start of last year, or the mouse who scuttled off at its tail end? Is it possible to bring down a government over a do-nothing budget?

The Conservatives have signalled, in broad fashion, what their program will be. They have already indicated there will be no new tax cuts or recurring spending measures, beyond the $19-billion already earmarked to fund year two of the Economic Action Plan. The focus will turn to the $56-billion deficit and, while there will be no absolute spending cuts, growth in all government departments will be crimped.

This suggests that any activity the government does announce will be at minimal new cost. As the National Post revealed last month, the Prime Minister sent out new mandate letters to his Cabinet telling them not to bring forward any unfunded proposals without receiving his prior approval. Only those proposals that addressed health, safety or national security concerns would be added to the list of projects he and his staff had identified in the mandate letter
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ON THE CHOPPING BLOCK
Little sign stimulus working
Terence Corcoran, Financial Post  Published: Saturday, February 27, 2010
Article Link

They say federal spending cannot be cut and the federal budget cannot be balanced. They even say spending must not be cut now, at this critical time, and that we need the federal government's $160-billion in deficit spending to maintain and stimulate economic growth.

In lock-step with these ideas -- at least tacitly endorsed by all of Canada's mainstream and Bay Street economists -- Finance Minister Jim Flaherty is reportedly ready to march the federal government into another big deficit and another high-spending budget next Thursday. There have been hints that some spending restraint might be introduced, but Mr. Flaherty is holding fast to the idea that government deficit spending, labelled stimulus, is essential to Canada's economic health.

"The first thing to do is make sure that the economy recovers, that's absolutely imperative," Mr. Flaherty said recently. "Once we see a sustained recovery, then we'll start moving back toward deficit reduction and then balanced budgets."

While government spending is all the rage in Canada and abroad, few explain exactly how this onslaught of government activity actually produces growth. U.S. President Barack Obama is under constant pressure to come up with another stimulus package on top of the US$862-billion extravaganza already in place on the assumption that the more the state does, even with deficits, the faster the U.S. and world economies will return to growth.

But what if it doesn't? What if, as much evidence suggests, it's all a crock of economic mumbo-jumbo that, at best, is an unproved bit of economic theory. The problem is not so much whether the theory is right or wrong; the problem is that it has never been shown to be true.

The foundation for the theory that government must take up more spending to stimulate the economy is largely the work of John Maynard Keynes, the early 20th-century economist, and his successors. Their ideas dominate economic convention, economic modelling, economists on Bay Street and Wall Street, and universities.
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Cutting federal spending is a lot harder than it sounds; Trimming across the board the 'coward's approach': economist
Saturday, February 27th, 2010 Canwest News Service
Article Link

The first time they get to Parliament, MPs take one look at the massive amount of money the federal government spends every year and decide it ought to be an easy thing to find the fat to trim.

"Every single minister of finance and every single president of the Treasury Board comes in with that exact statement and every single one of them has left with their tail between their legs when they finally realize that almost all the money is assigned to some program," said Don Drummond, the chief economist at TD Bank.

Before joining TD Bank, Mr. Drummond was one of the top bureaucrats at the federal Finance Department and played a key role in crafting the historic budget of 1996. That budget, introduced by then-finance minister Paul Martin as Canada's debt was ballooning out of control, contained a massive $11.7-billion worth of spending cuts. No government has ever come close to that kind of cut.

Mr. Martin would deliver another round of spending cuts in the 1998 budget and is one of just three finance ministers since 1960 to have wrangled in a budget that actually cut Ottawa's spending.

Bureaucrats and politicians agree: the list of finance ministers who cut spending is a short one because cutting spending is one of the toughest things a politician can do. Even controlling growth in spending has not been easily accomplished. In the last 50 federal budgets, spending growth has been held to 3% or less just 12 times, most recently by Jim Flaherty in 2008. That year, he held spending growth to 2.6%. Then the recession hit and Mr. Flaherty, like finance ministers around the world, turned on the taps. Spending in last year's budget grew by $33.8-billion or 14.1% compared to 2008.
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[Edward Campbell]

The end of the CANWEST article (the last one in the list above) quotes Don Drummond, Chief Economist at TD Bank, as follows:

Mr. Drummond encourages politicians to aim at an overall government-wide savings target — a 2% cut would be something in the range of $4-billion to $6-billion — but to hit that target by applying deeper cuts in some areas and lesser cuts elsewhere.

Drummond is quite right: some (even several?) programmes are, as he describes them, "crappy" and he suggests, speaking of across the board cuts:

"But it's the coward's approach and it's the worst approach because when you cut 2% off everywhere, you compromise the ability to deliver a good program and you take a crappy program and you keep giving it 98% funding."

Look at this list of government departments and agencies and tell me, please, that one cannot find at least $20 Billion in useless, wasted, indeed "crappy" spending that needs to be cut. If Day, Flaherty and Harper can find $20 Billion to cut by axing complete programmes and even whole agencies - and I'm convinced a schoolgirl could find at least that -  then most programmes, the ones that aren't "crappy," can carry on and a few, vital ones can even grow a bit.

My guess: a brave, pragmatic PM could cut $10 to 15 Billion in federal spending on "crappy" programmes and useless agencies per year, year after year, for three or four years in a row and the country would be better off for it and his approval ratings would go up.

 

[Old Sweat]

Look at this list of government departments and agencies and tell me, please, that one cannot find at least $20 Billion in useless, wasted, indeed "crappy" spending that needs to be cut. If Day, Flaherty and Harper can find $20 Billion to cut by axing complete programmes and even whole agencies - and I'm convinced a schoolgirl could find at least that -  then most programmes, the ones that aren't "crappy," can carry on and a few, vital ones can even grow a bit.

My guess: a brave, pragmatic PM could cut $10 to 15 Billion in federal spending on "crappy" programmes and useless agencies per year, year after year, for three or four years in a row and the country would be better off for it and his approval ratings would go up.

I'm sure you are correct. I am also sure it is will prove difficult to attain, both because the opposition and the media will claim the cuts are going to result in widows and oprhans starving in the streets, and because the public service may torpedo the effort using the "cut the musical ride" ploy. Of the two, the latter is the far more serious impediment, and it will take real leadership by the senior leaders of the public service to provide some direction and some ruthless response to these efforts as they arise.

 

[COBRA-6]

I'm sure you are correct. I am also sure it is will prove difficult to attain, both because the opposition and the media will claim the cuts are going to result in widows and oprhans starving in the streets, and because the public service may torpedo the effort using the "cut the musical ride" ploy. Of the two, the latter is the far more serious impediment, and it will take real leadership by the senior leaders of the public service to provide some direction and some ruthless response to these efforts as they arise.

I agree with both Edward's and Old Sweat's assessment. We see this protectionism in the CF as well, as anyone who has had involvement in the Strat Review can attest to. Offer up the unpalatable as your bottom 5% and hope the centre backs off...  :

As a taxpayer I am hoping for the kind of program cuts that Edward suggests, fingers crossed!

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from the Financial Post is a budget analysis with which I fully agree:

http://network.nationalpost.com/NP/blogs/fpcomment/archive/2010/03/04/tk.aspx

Terence Corcoran: Welcome to the jukebox economy

March 04, 2010

By Terence Corcoran

No government has ever willingly admitted to wasting a dime, let alone $164.2-billion — which is the total increase in the national debt that Ottawa has now accepted as an immovable number. Not only is this a figure that will not be reduced. It’s now a target to be proud of, a symbol of discipline. Nothing will now stand in the way of Finance Minister Jim Flaherty’s budget plan to hit that minimal target, raising the national debt to $622.1-billion, or 31.9% of GDP, by 2014-15.

In the economic culture of our time, in which government is seen as the engine of growth and prosperity, maybe it is too much to expect anything more. We live in what veteran Vancouver investment advisor Bob Hoye has called a jukebox economy.  “Jukebox economics,” he wrote recently, “is a suitable description of the notion that the economy can only be kept going if the government feeds it quarters.”

So long as jukebox economics is the dominant economic ideology in Canada and elsewhere,  the orthodoxy that guides our politicians and the conventional wisdom our media feeds off, we will continue to get budgets like the one Mr. Flaherty delivered on Thursday. In his speech he kept pumping quarters into the machine, calling the spending “investments” and describing the outcome as “jobs.”

Quarters in, jobs out. “We are in the middle of the largest federal investment in infrastructure in over 60 years. We are putting Canadians to
work.” Are these good investments producing worthy jobs? Will they boost productivity and real economic gains that will actually generate what Canada desperately needs, which is greater wealth and progress that actually increases the standard of living for Canadians?

Nobody’s really counting. The word “productivity” didn’t cross Mr. Flaherty’s lips, even though it is universally acknowledged as Canada’s single greatest weakness. Even in the best of times, Canada falls behind. In the 424-page official Budget 2010 document assembled by scores of economic experts, the productivity problem is studiously avoided. The case is never made that the massive multi-year spending plans could really generate productivity gains, most likely because Finance Canada officials know they don’t exist. Of about 15 mentions of productivity gains, most are associated with a few tax cuts and the tariff reduction on manufacturing equipment imports — one of the few worthy measures in the budget.

As for the spending, no discussion of what productivity gains might flow from the long, long list of corporate handouts, R&D subsidies, economic cluster stimulus, billion-dollar giveaways to forest companies, agriculture programs, slaughterhouse subsidies, ehealth programs, nuclear power grants, regional grants, carbon capture technologies, green infrastructure funds, renewable energy grants.

The non-corporate spending is an even more unlikely source of productivity gains. The billions allocated to social housing,  infrastructure projects, urban transit too often ends up creating high-wage union jobs at taxpayer expense. The budget takes no account of the productivity-draining effects of equalization payments, federal transfers, union and government control over key sectors such as health care and public services. Indeed, the budget encourages continued government control.  Even the federal civil service will not be touched in any significant way by the tentative control measures mentioned in the budget.

When all spending is an investment in jobs, the jukebox must be continually fed lest the theoretical jobs stop materializing. The budget document trots out the usual Keynesian economic calculation techniques, using “multipliers” to argue that government spending creates more benefits than the losses that come from maintaining high taxes. It even cites U.S. President Barack Obama’s economic advisor, Christina Romer, who claims that $1 of government spending produces $1.40 in economic growth.

Also following the Obama line, the budget produced a “Job Impact” analysis that claims that by the end of 2010, Ottawa’s Economic Action Plan has “created or maintained” 220,000 jobs. The government said, for example, that about 52,000 jobs are being “protected” in the auto sector as a result of the $14.6-billion Canada-United States auto bailout. But has the productivity of the auto sector improved? Possibly, but not likely. The contribution of government handouts and spending to productivity — net increases in growth and prosperity — is at best suspect and likely non-existent. Some of this is obvious. The transfer of $1-billion to help companies bury carbon emissions creates jobs, no doubt about that, but the productivity gain can only be negative. Nothing is added to the economy.

Carbon capture is a new productivity-reducing cost that is now being added to the national tax burden and claimed as a source of growth.

The jukebox is in full swing, but is that really economic music we’re getting?

Financial Post

Productivity is the word that frightens the overwhelming majority of Canadians, confirming that our national education system – primary, secondary and post secondary – is a resounding failure. We spend and spend and spend, as Corcoran says, on “productivity-draining” programmes, some of which are important but none of which are “sacred trusts,” while ignoring the “productivity enhancing” programmes like education and research and a tax system that supports business innovation.

 

[TimBit]

What I'm about to say will be highly unpopular, but hey, what the heck. From your writing, I suspect not all of you have spent time in HQ's. Well I'm here right now. Anf things are not as simple as they seem from the foxhole...

1. Regarding "red tape" and cutting the fat.
Last year I had a general officer visit my unit and during his presentation, he said, "there is a reason why generals and admirals with multiple commands get jobs in Ottawa...those are the toughest jobs". Similarly, I had an infantry captain who served in the Sandbox and who is now an SO here tell me "from my foxhole it felt like people in Ottawa didn't know their head from their asses but now I'm starting to see the big picture." I'm not condoning waste and extravagant spendings here...but the fact is, it is unmeasurably easier to mount a company assault, even a campaign plan, than to: attract funding, manage international relations, ensure fair transparent and efficient procurement (arguably not the case!!!) and so on. In the process, and because of the POLITICAL culture of ass-covering and vote attraction, people want 1000 opinions before committing to something and that 1. takes time  2. takes ressources and 3. creates a myriad of small seemingly useless units to provide theses opinions. That's right folks, newsflash, if the elected officials were not first and foremost concerned with re-election then things might be more expedient and the PS would not be so concerned with details. Politicians make rules so that their will, which they are uncertain of in the first place, is carried out by the PS, i.e. "I don't wanna be caught with my pants down giving contracts to my mistress's company so there you go you need three quotes. Ah yes, but there are only two providers. Sorry then can't do it".

See, remove the political fears and no problems!

Dealings with other depts as well is a major war. You think modern warfare is complex? Gee, try dealing with PCO.

Again, guys, I'm not saying there isn't any place to cut... I'm saying, many have tried to cut the fat before. And the reason they have failed is not because of union pressures (well sometimes) or because of empire building or because of PS disloyalty. It is because public policy is extremely complex and based on often ill-defined objectives (finger the Hill here). And once faced with that complexity, it is often much easier to let it lay low.

2. The useless, fat cats departments.
AH! Of course... well, I invite you all to name one and I'll try and demonstrate its usefulness. I said I'll try. The fact is, we have vested interests in Defence, Public Safety and International Affairs. So those are important to us. But Agriculture and Oceans and Fisheries are useful to others. So is HRSDC and or NRCan... they are important to others. I could go on and on. Basically, these departments exist because someone has a stake in them. And so does the government. Granted, the stake in them is sometimes puny, but can be concentrated, i.e. the grain board or dairy commission.

That image of the poor government fighting the evil bureaucracy is absolute rubbish, in fact. The government is very happy to have that comfortable ass-cushionning below itself.

Now, I'll don my flaming-shield and wait for the bricks to be thrown    ;D

 

[Bluebulldog]

Just saw the outcome of the new Federal Budget.

Looks like despite poor economic conditions, and other Departments being cut, DND got it's 2% increase, and will continue to do so until 2013...

Good news. Looks like someone up there "gets it".

 

[aesop081]

You didnt like the other budget thread that started sometime yesterday ?

 

[Jed]

I have no bricks to throw from here, Timbit. In my opinion you have a pretty accurate take on the situation.

My only comment is is that there is rampant systematic inaction, and therefore waste from lack of production, in all government departments. Far too much cya, no one is willing to take any risk. And why should a Public Servant take that risk, because, lord knows his employer does not have the loyalty to back him.

Things went way down hill after the Hill broke faith with their Public Servants following the Liberal financial scandals from a few years ago. It is rather a paradox that now the Conservative minority government hammers on the primarily Liberal voting Public Service.

 

[TimBit]

My only comment is is that there is rampant systematic inaction, and therefore waste from lack of production, in all government departments. Far too much cya, no one is willing to take any risk. And why should a Public Servant take that risk, because, lord knows his employer does not have the loyalty to back him.

Ah well there, can't disagree with you...  unfortunately  :'(

 

[a_majoor]

The Toronto Star seems to get it:

http://www.thestar.com/news/canada/federalbudget/article/775335--hebert-payback-budget-will-set-tory-hearts-aglow?bn=1

Hébert: This budget will set Conservative hearts aglow
Published On Fri Mar 05 2010

By Chantal Hébert National Columnist

OTTAWA—It's payback time for Stephen Harper.

A year ago, the Prime Minister was forced to set aside his Conservative credo to deal with the recession and to buy his way out of a tight political corner in Parliament.

To the consternation of many of his core supporters, last year's budget with its billions of dollars of stimulus spending could have been penned by a Liberal government.

That was a nightmare for Conservative purists. The 2009 budget generated a record deficit and it saw the federal government intervene heavily in the private sector, in particular to salvage Ontario's auto industry.

This year, the ideological tables are turned and, with Michael Ignatieff literally watching from the sidelines, Harper is set to start clipping the wings of future federal governments.

The Liberals will give Harper's austerity budget a pass – by not showing up in great enough numbers to defeat it when it is up for a vote – to avoid an election they say Canadians don't want and they fear they would lose. But they will also let the budget and its attending deficit-elimination plan survive for lack of having a credible alternative to put to voters.

Under the blueprint submitted to the House of Commons by Finance Minister Jim Flaherty Thursday, government programs and the civil service that operates them will bear the brunt of the upcoming federal efforts to eliminate the deficit.

Over the next three to five years, little or no new money will flow to the operations of the federal government. The defence department, a Conservative spending priority since 2006, will see its budget grow more slowly than anticipated. Most other departments will see little or no growth for the foreseeable future and some will also endure outright cuts.

Flaherty says his plan will ensure Canada is virtually deficit-free within five years.

Whether the optimistic forecasts that underpin his promise will pan out is far from certain.

In the past, the dividends of such cost-cutting exercises have not lived up to their advance billing. When all is said and done, the federal infrastructure is a spending, not a savings machine.

But under any scenario the federal government that would emerge from the exercise in five or six years would be significantly smaller, both in size and in the potential scope of its activities.

Its capacity to undertake major new programs or to respond to emerging challenges would be severely curtailed as would that of a shrunken federal civil service.

The proposition Harper and Flaherty are putting to Canadians is that limiting the ambitions of future governments is the price to pay to avoid cutting transfers to the provinces or raising taxes.

To the degree that he has so far maintained that he too could chart a zero-deficit course while forsaking both of those routes, Ignatieff has actually bought in to the same rationale. A Liberal government committed to neither raising the GST or other taxes nor cutting social programs would also have to put the federal government on a severe diet to balance the books.

And so, while the Liberals take issue with the Conservative plan, they are at this point badly placed to question its thrust.

The Liberals have always maintained that one of the features that most differentiated them from the Conservatives was their faith in the benefits of a strong activist government.

Indeed, clipping the wings of the federal government has long been a key objective of a party such as the Bloc Québécois. But when the budget is put to a vote, later this month, Harper will look to Ignatieff and not to Gilles Duceppe or, for that, matter, Jack Layton to facilitate its adoption.

Chantal Hébert is a national affairs writer. Her column appears Monday, Wednesday and Friday.

 

[Edward Campbell]

Not everyone is wringing their hands, apparently, at least not according to this story, by Army.ca member David Akin, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from the Ottawa Citizen:

http://www.ottawacitizen.com/business/Economists+give+budget+boost/2646680/story.html

Economists give Flaherty boost in budget debate

BY DAVID AKIN, CANWEST NEWS SERVICE

MARCH 5, 2010

OTTAWA — Finance Minister Jim Flaherty hit the road Friday to begin selling the federal budget, a job made easier by some Bay Street economists who conclude that Canada has a good chance of eliminating the deficit even faster than the government predicts.

Flaherty travelled to London, Ont., where, from a Tim Hortons coffee shop that became an impromptu broadcast studio, he made appearances on several television and radio programs.

At lunch, he promoted his government's fiscal plan at a meeting of the London Chamber of Commerce.

"What's remarkable about (Thursday)'s budget is that it is the smallest budget in terms of new spending in more than 10 years in Canada," Flaherty said. "We said no a lot in the last two months and you have to do that if you're going to balance the budget in the medium term."

But criticism of the government's plan to say no to billions of planned spending on foreign aid continued Friday, this time from the anti-poverty group that has U2 singer Bono on its board of directors.

"After the Olympics and in the run-up to the G8 and G20, Canada is in the global spotlight like never before," said Oliver Buston, European executive director of the anti-poverty group ONE. "By choosing not to increase investments in countries that need it most, Canada is missing an opportunity to fortify its role as a global leader and provide much-needed moral and political leadership on these issues."

Flaherty, in his budget, says a combination of spending cuts and a return to economic growth will let him balance the budget without raising taxes. But just as Flaherty drew immediate fire for cutting in the wrong areas, he's also drawn flak for tabling forecasts for the country's economic growth and anticipated government tax revenue that are too optimistic and unrealistic.

"The Conservative budget is based on a total fiction," Liberal finance critic John McCallum said Friday in the House of Commons. McCallum, a former chief economist at the Royal Bank, has warned that if Canada's economy does not grow as fast as Flaherty anticipates, the budget deficit will grow.

But some leading Bay Street economists gave Flaherty some political cover from those accusations.

"The deficit could actually improve faster than expected," said Douglas Porter, the deputy chief economist at BMO Capital Markets.

George Vasic, the Toronto-based strategist for UBS Securities Canada Inc., raised his already bullish forecast for Canadian economic growth for this year to 3.2 per cent, well above the 2.6 per cent growth Flaherty predicted Thursday.

"The bottom line is that the U (-shaped recovery) is looking more like a V," Vasic wrote in a research note.

He also raised his growth forecast to 3.5 per cent, up from 3.4 per cent, for 2011. By comparison, Flaherty's forecast has the economy growing at 3.2 per cent next year.

The difference between Vasic's forecast and Flaherty's is a difference of tens of billions of dollars of economic activity — and the tax revenue that goes along with that. If tax revenues rise faster than Flaherty anticipated, the federal government will either be back in the black faster than it thought or it may be able to forgo some aspects of its spending restraint program.

Sheryl King, the Toronto-based economist for Bank of America-Merrill Lynch, wrote "we differ from the government in how quickly the deficit will likely be worked down." She concludes that, because Canada's economy will grow much more rapidly than the federal Finance Department predicts, the deficit will also melt much more rapidly than Ottawa is willing to forecast.

"Our above-consensus . . . forecasts over the next couple of years suggest a quick initial drop in the deficit that will contribute to the market perception that a zero is not far off in the horizon," King wrote in a research report published Friday.

Fact Box: Growth vs. deficit

The government is relying heavily on the increased tax revenue that a rapidly growing Canadian economy produces in order to eliminate the federal deficit. Here is the forecast for percentage growth in real gross domestic product as published in the budget followed by the Department of Finance's estimate for the deficit. Generally, if growth is faster than forecast, deficits are smaller and vice versa.

    2010: 2.6 % / $49.2 billion

    2011: 3.2 % / $27.6 billion

    2012: 3.0 % / $17.5 billion

    2013: 2.8 % / $8.5 billion

    2014: 2.6 % / $1.8 billion

© Copyright (c) Canwest News Service

I daresay that support for Flaherty’s budget is anything but universal but mainstream economists do not have much at which to shoot. It is, sensibly, a tough prescription for tough times.

I just hope that, despite the V shaped recovery, Flaherty and his Finance officials can restrain Harpers evident desire to be a big spending/ conservative, à la George W Bush. Big spending, in fact anything other than real, measurable reductions in several spending envelopes – not including defence, is what is needed for 2011 through to 2014.

 

[Journeyman]

But criticism of the government's plan to say no to billions of planned spending on foreign aid continued Friday, this time from the anti-poverty group that has U2 singer Bono on its board of directors.

It can't be easy sleeping at night for Flaherty, knowing that U2's Bono is wagging his finger at him  ;D

 

[Kat Stevens]

If Bono, Sean Penn, and sundry other uber rich celebrity mouth pieces were really serious about hunger and poverty, I dare say their combined wealth could put a pretty serious dent in the problem.

 

[Brad Sallows]

>2. The useless, fat cats departments.
AH! Of course... well, I invite you all to name one and I'll try and demonstrate its usefulness.

All departments and agencies have some use.  The proper debate is not about the usefulness of what is funded; the debate is about how much funding there is and therefore how many of the useful things can be funded; there is a secondary debate about which of the useful things should be transferred to other levels of government to allow people to take electoral decisions about the usefulness at a finer level of granularity (provincial, municipal).  Think of it as an administrative estimate: requirements vs resources.  There are basically two ways to phrase the aim of the estimate: determine how much revenue is needed to keep everything, or determine what fraction of everything can be retained given such-and-such revenue.  I favour the latter as more practical.

The proper course is to rank all the programs, initiatives, projects, etc which are maintained and/or funded by departments and agencies and keep a running total of costs - at the top of the list, place the cost of servicing the federal debt.  When the cost matches revenue - with or without a set aside somewhere in the list for debt reduction - draw a line.  Remove everything below the line and put it on a nice-to-have list to be restored if future revenue increases allow.  When systemic changes result in permanent revenue reductions, remove items from the bottom of the list until balance is re-established.

If additional debt is to be taken on and included in "revenue", it should represent one of only two things:
1) Extraordinary social spending (transfers to individuals) to mitigate an extraordinary economic crisis
2) Tangible investment.

 

[TangoTwoBravo]

What I'm about to say will be highly unpopular, but hey, what the heck. From your writing, I suspect not all of you have spent time in HQ's. Well I'm here right now. Anf things are not as simple as they seem from the foxhole...

...but the fact is, it is unmeasurably easier to mount a company assault, even a campaign plan, than to: attract funding, manage international relations, ensure fair transparent and efficient procurement ( You think modern warfare is complex? Gee, try dealing with PCO.

Budgets are out of my lane, but I can't resist the lure of your post.

You might find that the people who posted before you (to whom I assume you are refering) actually have considerable experience serving in strategic level headquarters.  Your post could stand on its own without presuming to talk down to people.

Regarding your post itself, have you actually mounted a company assault or a campaign plan?  The simple things are very hard sometimes.

Don't make assumptions on the critical importance of your HQ based on the people who are sent there.  We only have so many tactical commands, and the people leaving there have to go somewhere.

I've worked as a minion in a number of HQs, and my own finding is that small is beautiful. You just need to be a ruthless prioritizer.

 

[Edward Campbell]

>2. The useless, fat cats departments.
AH! Of course... well, I invite you all to name one and I'll try and demonstrate its usefulness.

All departments and agencies have some use.  The proper debate is not about the usefulness of what is funded; the debate is about how much funding there is and therefore how many of the useful things can be funded; there is a secondary debate about which of the useful things should be transferred to other levels of government to allow people to take electoral decisions about the usefulness at a finer level of granularity (provincial, municipal).  Think of it as an administrative estimate: requirements vs resources.  There are basically two ways to phrase the aim of the estimate: determine how much revenue is needed to keep everything, or determine what fraction of everything can be retained given such-and-such revenue.  I favour the latter as more practical.

The proper course is to rank all the programs, initiatives, projects, etc which are maintained and/or funded by departments and agencies and keep a running total of costs - at the top of the list, place the cost of servicing the federal debt.  When the cost matches revenue - with or without a set aside somewhere in the list for debt reduction - draw a line.  Remove everything below the line and put it on a nice-to-have list to be restored if future revenue increases allow.  When systemic changes result in permanent revenue reductions, remove items from the bottom of the list until balance is re-established.

If additional debt is to be taken on and included in "revenue", it should represent one of only two things:
1) Extraordinary social spending (transfers to individuals) to mitigate an extraordinary economic crisis
2) Tangible investment.

I'm with Brad; I agree that every single department, agency and programme has a "cheering section," often a very loud one and, equally often, the volume is inversely proportional to the utility of said department, agency or programme.

Consider: 'Rights & Democracy’ (properly the International Centre for Human Rights and Democratic Development); it is much in the news these days. It was established, by an act of parliament in 1988 and it has been hectoring foreign folks - at arms length from the Government of Canada - ever since. There are over 150 similar organizations around the world. Now, I'm sure that many, many Canadians derive intense satisfaction when one of Ed Broadbent's successors wags a plump, well manicured finger at some third world dictator or, much, much better at, say, Israel or the USA or <gasp> Harper's Canada, but where does working "with individuals, organizations and governments in Canada and abroad to promote the human and democratic rights defined in the United Nations' International Bill of Human Rights," rank against, say, paying down the national debt or defending the realm or managing the radio frequency spectrum? Especially considering that the UN's Universal Declaration of Human Rights is a load of rubbish. Don't believe me? Look at it, at Article 24, for example. Do we really want to admonish countries because someone doesn't have a long enough vacation? It's many defenders will say, "It only costs $11 Million per year," but, hey, to paraphrase the late, great US Senator Everett Dirksen, $11 Million here and $11 Million there and pretty soon you're talking real money.

Cutting is politically hard because every cut, except to national defence or symphony orchestras, will draw a tidal wave of criticism - again, inversely proprotional to the real damage caused by the cut in question. But cutting can be done; there are, as TD Bank Chief Economist Don Drummond said a few days ago a load of "crappy programmes" that not only can be cut, they need to be cut. Cuts require some political courage which is why budgets, especially in Canada, grow and grow and grow and ...

 

[Old Sweat]

Consider: 'Rights & Democracy’ (properly the International Centre for Human Rights and Democratic Development); it is much in the news these days. It was established, by an act of parliament in 1988 and it has been hectoring foreign folks - at arms length from the Government of Canada - ever since. There are over 150 similar organizations around the world. Now, I'm sure that many, many Canadians derive intense satisfaction when one of Ed Broadbent's successors wags a plump, well manicured finger at some third world dictator or, much, much better at, say, Israel or the USA or <gasp> Harper's Canada, but where does working "with individuals, organizations and governments in Canada and abroad to promote the human and democratic rights defined in the United Nations' International Bill of Human Rights," rank against, say, paying down the national debt or defending the realm or managing the radio frequency spectrum? Especially considering that the UN's Universal Declaration of Human Rights is a load of rubbish. Don't believe me? Look at it, at Article 24, for example. Do we really want to admonish countries because someone doesn't have a long enough vacation? It's many defenders will say, "It only costs $11 Million per year," but, hey, to paraphrase the late, great US Senator Everett Dirksen, $11 Million here and $11 Million there and pretty soon you're talking real money.

Call me a cynic, but I have always believed that the centre was created to keep Ed Broadbent busy and out of Mulroney's hair after he stepped down as leader of the Federal NDP.

 

[TimBit]

Budgets are out of my lane, but I can't resist the lure of your post.

You might find that the people who posted before you (to whom I assume you are refering) actually have considerable experience serving in strategic level headquarters.  Your post could stand on its own without presuming to talk down to people.

Regarding your post itself, have you actually mounted a company assault or a campaign plan?  The simple things are very hard sometimes.

Don't make assumptions on the critical importance of your HQ based on the people who are sent there.  We only have so many tactical commands, and the people leaving there have to go somewhere.

I've worked as a minion in a number of HQs, and my own finding is that small is beautiful. You just need to be a ruthless prioritizer.

Tango2Bravo

FAR from me the idea of putting down lower level orgs while glorifying HQ`s...wars are won at the front, not in Ottawa. What I am saying is that social policy and strategic objectives are complex things, affected by hundreds of things which we often do not understand well.

Look at future capabilities/missions? That is one frigging hard questions with many affecting factors, i.e. demographics, climate change, economics, oil, technology... compare that with a company assault (haven't mounted one but have participated): ennemy positions, ammo, will to fight, terrain, weather. Don't get me wrong, again, fighting is hard! But it is not as complex from a intellectual point of view as social policy. How to fix Afghanistan for one? Even they (the Afghans) don't agree! Like I said, I'm also basing this on what many former commanders have told me... Ottawa is a frightful maze where the Flak may not be as deadly as that in the field, but comes from unexpected directions at unexpected times when you don't even know what your objective is nor what your ressources are.


I did not mean to put anyone down... apologies if it was taken that way.

 

[a_majoor]

Well if we want to talk spending cuts, we can start with some broad categories:

1. Entertainment. Governments do not exist to entertain us, so anything in that category (and that includes "own the podium") gets the chop. Actually Paul Gross gave the best justification for cutting subsidies to the television and movie industry while testifying for such subsidies when he pointed out the TV and Film industry generated $8 billion in revenue. Hardly a bunch of starving artists.

2. Competition with the private sector. This includes Crown corporations (an immediate $8 billion/year in savings) but also subsidies to business. Propping up inefficient business or obsolete jobs by taking money away from the productive is malinvestment at its worst, and saves over $30 billion/year.

3. Follow on savings. Ending the two major spending categories will result in savings from the operations budget of government, since many civil servants will no longer be needed. While this result cannot be quantified [by me anyway], it is a definite saving to taxpayers.

4. Debt reduction. Cutting 38 billion +/year from the Federal budget will eliminate the deficit and cut down the national debt. This will reduce the 30 billion/year in carrying charges (although very slowly), resulting in further savings.