\u0027Something has to give,\u0027 the PBO said. \u0027Either they abandon some of the commitments they have made, or they increase taxes.\u0027
While budgets speak to good intentions, it is the parliamentary estimates process that shows where the money is actually spent.Sign up to receive daily headline news from Ottawa Citizen, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc.
That would make sense, if the government was spending less on public service salaries, but the PBO says public and private sector spending increases are advancing in lockstep. The cost of federal public sector salaries and benefits reached $55 billion this year, or about $130,000 per full-time employee. This explodes the NDP’s theory that contractors are “crowding out” public servants and setting up a shadow bureaucracy.
In the latest estimates, $7.7 billion was “frozen” by Treasury Board for one reason or another — a $2.2 billion increase from last year, which makes little sense given the uncertainty caused by the pandemic. That includes around $1.6 billion for the broadband roll-out across the country and spending on “strategic innovation,” which you might imagine is a priority right now. One graph in the PBO report shows accumulated lapsed funds at around $40 billion.
That is welcome, but it is a long way from the two per cent of GDP target to which Canada is committed. It is disquieting that the PBO does not believe that even at these levels, the government has planned to set aside enough money to fund the acquisitions of the F-35 fighter jets and new surface combatant ships that have already been announced. In 2018, as part of its Strong, Secure and Engaged strategic plan, the government announced a 20-year spending plan that totalled $108 billion on an accrual basis or $164 billion on a cash basis .
The likely explanation is that adding tens of billions of dollars to program costs would have immediate implications for Finance Minister Chrystia Freeland’s budget process. The dark art of budget-making means that expenses can be punted into future years but costs cannot be hidden indefinitely.
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