In response to critics who accuse it of spending Canadians’ money without counting the cost, the federal government announces its intention to tighten its belt and save $12.8 billion over the next five years.
The bulk of these savings will come from the reduction in the use of consultants and external professional services, which has increased sharply in recent years, in particular to the benefit of the firm McKinsey. Information to this effect had already leaked in the media.
Since the Liberals have been in power in Ottawa, the fees paid for external consulting services have increased by 95%, has already noted the parliamentary budget officer, Yves Giroux.
In her budget on Tuesday, Finance Minister Chrystia Freeland estimates savings of $7.1 billion over five years can be achieved by reducing the use of outside consultants and travel.
Federal departments and agencies will also be put on a diet to cut spending by 3%. Ottawa intends to recover $7 billion in expenses in four years, without reducing services to the population.
The same 3% spending cut order will be passed on to federal Crown corporations, for expected savings of $1.3 billion over the next four years.
The Trudeau government, which has been criticized for having spent more than was necessary, in a way recognizes that this has been the case. The Freeland budget proposes to cut previously announced funding when monies have not been spent or are no longer needed. “When implementation is slower than expected, adoption is lower, or circumstances have changed, it makes sense to ensure that government resources are always directed to the most appropriate objective,” reads -on in the document. Savings of $6.4 billion are expected from this federal fire adjustment, of which $3.4 billion will be recovered as of next year.
The spending cuts announced in the budget will not prevent the federal deficit from being higher than projected in the fall fiscal update. The Minister of Finance then forecast a deficit of 30.6 billion for the financial year 2023-2024, while it will instead be 40.1 billion according to Tuesday’s budget.
