I'll be very quick.
I published, in How Ottawa Spends, I think the definitive account of the Liberal government's downsizing, 1995-98 with—full disclosure—the help of two anonymous, very wonderful public servants who fed me extraordinary amounts of data.
To answer the question, I did look at what the impact was, because I've lived in Ottawa all my life, and one of the beliefs at the time was that this was going to turn Ottawa into—if I can use Mick Jagger's current phrase—a ghost town, and it was going to devastate the city of Ottawa. In fact, if you look at the GDP data that Philip Cross just alluded to for the local economy and then you look at the national economy, Canada prospered mightily after the largest downsizing in Canadian history. We had very strong growth all though the latter half of the 1990s after the largest downsizing austerity program in our history.
I don't think that the evidence supports what you said. There's also an OECD study, and I can't remember the name or the date of it off the top of my head, but I've read it. It made an analysis of different downsizings over time. It understandably came to a mixed conclusion, saying in some instances it led to more growth and in some instances it didn't, but I don't think we can say that across the board a downsizing program will lead to diminished growth.