Government Operations Committee on Oct. 17th, 2006

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I'm saying there are 3.2 million people who can't read a medicine bottle, a job application, even, as I said, an election ballot.

I'm just stating the facts here when it comes to program cuts, and I was just focusing on the program cuts.

[The Chair, Liberal, Diane Marleau]

Mr. Bains--

[John Baird, Conservative, Ottawa West—Nepean, ON]

You've said two things that I didn't say.

[The Chair, Liberal, Diane Marleau]

--I think the time is up and you'll have a chance to review it later on.

We're going to go to Madame Thibault.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

Distinguished guests, as you know, we are here because of a Bloc québécois' motion that was adopted by the committee. I am pleased that all of my colleagues around this table agree that it is important for us to consider the approximately $1billion in budget cuts that will be taking effect over the next two years.

Mr. Baird, I am surprised, to put it mildly, by some of the things you said in your remarks. As can be seen in a number of documents issued by your government, you talk about openness, transparence and responding to Canadians needs.

Looking at the cuts that have been made, I would say that you have actually affected—in the sense of deeply impacting—the most disadvantaged people and reduced service to the public. That is obvious, since three quarters of the cuts are made to those areas, with only one quarter resulting from reductions in operating expenditures.

So the government could have reduced its operating expenditures, but you chose to cut services to the public. I will give you a few examples: eliminating advisory groups, as well as eliminating funding for groups that assert people's rights and act as a counter weight to government. Those include the Law Commission of Canada, other groups such as the ones mentioned by my colleague just now, and groups involved in women's issues.

As an aside, I want to mention the comments made by your colleague, the Minister of Canadian Heritage and the Status of Women. Her department indicated that the eligibility criteria for one of its major programs, the Women's Program, had been changed. From now on, research and pooling activities, along with advocacy and efforts to influence the federal, provincial and municipal governments are no longer eligible. So we are not talking about cosmetic changes.

Coming back to some other aspects, you have eliminated so-called unused funding. One example is the whole crisis in the forestry sector caused by the mountain pine beetle. The government decided to eliminate $11 million that had not been used. Millions of dollars have also been removed from food inspection activities. The same thing was done in the textile area and the Department of Fisheries and Oceans. One wonders why this funding was not used. Perhaps the conservative government was not interested in having initiatives take up that funding?

The uncommitted money included $40 million for social economy programs. Quebec will be especially hard hit by those cuts, since it will lose $5 million of the $28.5 million set aside for that purpose.

I will conclude with three other examples. The first concerns the cuts to the Museum Assistance Program. I will take a very local example from my region. We have a travelling museum exhibition because not everyone in the Gaspé region and the Lower St. Lawrence can get to Rimouski. So the exhibition is taken from place to place so that people in the region can see it. In Rimouski, we were able to see it, but the others will not. This is terrible, because when people cannot get to culture, culture needs to be brought to them. It is an essential aspect of people's quality of life.

The second example is the Visitor Rebate Program, which was cut in order to save $78 million. That will certainly affect tourists to some extent.

The third is the elimination of $17 million for youth employment programs.

In my view, minister, the government could have reduced its spending. I want to know why, other than some meagre efficiency gains, you did not make your cuts within the government apparatus in order to streamline government instead of directly affecting the public in this way. I believe that you chose to have a serious impact on people. I would like to know why.

Moreover, I would like to know whether the departments received instructions outlining requirements to make «ideological cuts» or whether they were able to determine what approach they wanted to take. You laid out your requirements in those instructions, basically. I would like to know how that was done.

My first question, which is why you did not cut more from government operating expenditures, is for Mr. Baird.

My second question is for Mr. Moloney.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Thank you very much for your presentation.

I agree that we had a choice. The first decision that the prime minister made was to reduce the size of cabinet.

After that, the first decision that our committee made was to cut the $23 million or $24 million that we saved by reducing the size of cabinet. That was the first place, of course, where we cut spending. That was the prime minister's first decision.

We also decided not to spend the approximately $20 million to increase the budget for regional ministers, such as my budget as minister responsible for Ontario. That decision is another good example.

In terms of the percentage of its budget, my department underwent the second largest cuts. That is how we were affected.

You also mentioned a number of other cuts. I know that if your budget were cut, there would be an impact. It would not be a good day for you.

I will continue in English.

To put the reductions in context, if I were to put 400 quarters on the floor here, these budget reductions would be take one single quarter off. When we were increasing spending by more than 5%, we took these savings and put them into health care and a cancer control strategy, and we increased supports to families with children with disabilities—to try to respond to other pressures.

So we may have valid differences of opinion, which I think is fair, but we had choices and our choice was to put more into health care, a cancer control strategy, and more to support families with children with disabilities.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Baird, you are telling us that you needed to make some cuts. I did not say otherwise. And I did not say that you had cut everything. But why did only 25% involve government operations?

You talked about Treasury Board. Over a 5-year period, from 2000 to around 2005, the Treasury Board's budget increased by 26%. I understand that you are going to say that you were not there, but you are there now. Given your responsibility as a minister, why did you not reduce your budget in a significant way and ask all the other departments to do the same thing, in order to trim the fat in government operations and leave the public with the services that are needed in the areas of culture or advocacy?

I said earlier that you had made ideological cuts. You cannot tell me that this is not true, since we know that you have eliminated all funding for advocacy groups. That is an objective you set out in certain departments. They did not just imagine it. Why have you affected the public directly in this way, instead of trimming the fat?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I reject the premise of the question, because I think we did lead by example in the directions I mentioned earlier. I think the internal savings are important.

The previous government led an expenditure reduction exercise that identified some $12 billion in internal operations. In many respects, they might have overreached and booked what I would call phantom savings—a “don't worry, be happy” type of expenditure reduction exercise. We have to constantly ensure that the reductions are doable. We wanted to ensure that we met reductions—

[The Chair, Liberal, Diane Marleau]

Thank you, Mr. Baird.

Briefly to Mr. Moore, and then followed by Mr. Kramp.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

When I first ran for office back in 2000, one of the dominant issues in that election campaign was the issue of the brain drain. I ran for office and was elected at the age of 24. One of the reasons I continue to run for office and continue to want to serve as a member of Parliament is to frankly work very strongly on competitiveness and to pay down our debt.

We cut less than one half of 1% of the federal government's annual spending; that's it, less than one half of 1%.

Navdeep Bains asked where the cuts are coming from. For example, we cut $20 million that was going to aquaculture, I believe, in the province of Nova Scotia. There was $20 million allocated and never spent. It was just sitting there.

We've decided in an ideological way, as Madam Thibault would say, to say that's frankly stupid. If the money is allocated but not spent, let's take the money and give it back to Canadian taxpayers in the form of tax relief. Better yet, in my judgment, tell my generation that you're not going to bankrupt the future by saddling them with debt from broken promises, which were never fulfilled, by politicians they've never met.

I think paying down the debt is critically important to this country and critically important to our future. I think the “boy who cried wolf” routine of the federal government in cutting less than one half of 1% of the federal budget to pay down the debt, so that young Canadians have opportunities and are not saddled by massive taxation with one-third of tax dollars going to pay down the debt, is responsible fiscal management. I think people who say that cutting less than one half of 1% of the federal budget is fiscally irresponsible are utterly out of touch with Canadians.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Thank you very much, Mr. Moore.

I would only clarify a remark I made earlier. When I talked about the $12 billion in savings by the previous government, 85% of those were internal, not 100%.

I agree. I think there are two ways to raise taxes: one, you do it directly; and two, you borrow money. You then give a tax increase to the generations that follow.

I think one thing we want to do is have a balanced approach, with real tax cuts to put more money into hard-working families that are struggling to make ends meet, debt repayment so that we can leave this country in better shape than we inherited it, and investments, such as the ones I mentioned in health care, which is of particular concern to folks in my consistency. We have to take a balanced approach on all three.

We didn't have the temptation to go on an end-of-year spending spree. In March in previous years they have spent upwards of $5 billion of unplanned money. The previous government set up billion-dollar foundations, often with little accountability and no access to information for the public. We avoided doing that and wanted to present a clearer picture of the finances. When there was a surplus, we didn't go on a spending binge. We paid down debt, which will mean a brighter future for the children of today.

To put that into context, when you think of $13.2 billion, what that equivalent would save, if it was all cash debt, would be about $650 million for this year, next year, the year after, and the year after that.

I think it was a prudent decision and one that I think Canadians welcome.

[The Chair, Liberal, Diane Marleau]

Mr. Kramp, you have five minutes.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

I would certainly like to thank the Treasury Board and our other guests for coming here, particularly on such short notice.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I heard you were going to be here, Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Well, I can assure you that I don't quite agree with some of the comments I'm hearing from some of the other members today. Quite honestly, I suppose I'm not only surprised, but I'm a little disappointed.

As you said, we have an aging society. The demands on the future are going to be literally heavier and heavier if we don't eliminate the debt and reduce the debt. As the Treasury Board president said, $650 million each year thereafter requires prudent management.

My opposition colleagues seem to have an attitude of “have money, will spend”. Well, we have a surplus and the surplus doesn't just happen; all parties have contributed to the surplus through the House. I would suggest that we have an obligation, as the Treasury Board president said, to ensure we finally have a level of accountability for our spending.

Could the Treasury Board president elaborate a little on this? People have asked, if we have this surplus, why do we need more savings? Why do we need savings? Why don't we spend it? Could you give me an answer on that?

[John Baird, Conservative, Ottawa West—Nepean, ON]

It's “don't worry, be happy” fiscal management. One of the important things is that we align the government's priorities with the people's priorities. Canadians expect us to manage their hard-earned tax dollars wisely and well, and to respond to their concerns, and the fact that something was a concern last year or ten years or twenty years ago when a program was announced doesn't mean it's a priority now.

Another real concern I have is that one of our colleagues in the House of Commons made the following statement: nothing starts a feeding frenzy more than the smell of cash around Liberal backbenchers. That's not a Conservative MP saying that. That's the member for Kings--Hants, who's a member of the Liberal caucus and a leadership candidate. I think he wisely identified a real concern, when we have big surpluses, about what his caucus colleagues might want to do with them.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

Obviously, for you and your committees to come up with these savings, they just don't come from one area. It isn't, either, one program that wasn't effective or wasn't delivering results or money left over; there are several areas of interest in which obviously you were able to come up with savings. Could you maybe identify some of those for us?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I'll tell you one area we didn't cut. My premier in Ontario was very strong in his condemnation of the Liberal government for cutting transfers for health care, which were cut by about $25 billion. My premier in Ontario fought hard against those Liberal cuts to the social fabric of Canada. That premier, of course, was Bob Rae, who was a very effective critic of the Liberal decision to cut $25 billion in transfers to the province. And we didn't do that. I'm particularly proud of that.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

We went through this exercise, and there's obviously condemnation, criticism, and praise. Where do we go from here? Is this the end of it now? Is this a one-shot deal? Where do you see us going in the future?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I think we should constantly be looking at where we are spending tax dollars wisely and well. And Mr. Kramp, you can pick up the paper any day and find examples where Canadians are expressing dissatisfaction. We heard just today, for example, that there are various Liberal ministerial aides who won free rides into the public service—and taxpayers are going to have to pay for it—where there was a scheme set up with phantom jobs. There's a potential for savings right there, if we can get to the bottom of yet another Liberal scandal.

We'll be looking into this. This report that exposed this came from an arm's length officer, Maria Barrados, the head of the Public Service Commission. Again it involved my friend the member for Kings--Hants and the member for Vancouver South, who you may want to get before this committee, Madam Chair, to ask them about it.

[The Chair, Liberal, Diane Marleau]

Thank you very much.

I must tell you, though, that we do know one thing: the cuts you've made in some areas are definitely not phantom cuts—the court challenges program, the women's bureau, the literacy programs. Let's face it, those aren't phantom cuts, and they hurt people who need help.

I'm going to go on now to Mrs. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Madam Chair, and good morning, Mr. Minister.

I recently met in Toronto with a number of community agencies--dozens of them in fact--unanimously very, very concerned and distressed about the cuts announced by your government. They're concerned because there was very poor communication. People were not consulted before the cuts were made. Some of them found out about cuts to their organization by looking on a government website. There seemed little concern about the impacts of these cuts.

And the cuts seemed to be particularly targeted to the not-for-profit sector in our society and some of the most vulnerable groups--the volunteer sector, literacy. Four in ten Canadians struggle with literacy. These programs are going to be affected. Women's programs are targeted. Now we see the word “equality” disappearing from the website of the Status of Women along with a 40% cut in their budget. We now see that for-profit organizations are going to be allowed to seek money from the Status of Women, so I wonder if the Royal Bank is now going to be eligible for grants from the Status of Women, as long as they don't seek equality. Immigrants are targeted and youth.

I'm very concerned about the cuts and the impact on our communities right across the country. And I have to say, for a party that campaigned on the issue of a democratic deficit and the need for a new democracy, squelching or reducing democracy by cutting advocacy programs and the ability of community organizations--some of the most marginal voices--to be able to speak up and challenge the government on issues of concern is very, very troubling. I think it's troubling to silence some of the most marginal voices in our society.

It's easy to always hear from the very powerful but less easy to hear from some of the people who are most marginal. And I include the court challenges program because without those resources some of the most marginal people would not have access to their full charter rights.

I've heard arguments today about economic efficiency, which of course we all support, and about the need to pay down the debt, which of course we all support, but a $13.2 billion surplus, the entirety of which goes to pay down the debt, doesn't make sense. This is at the same time as we continue to subsidize the oil and gas industry to the tune of $1.4 billion. It seems bizarre to target the most vulnerable sectors.

Mr. Minister, why is your government trying to silence some of the most marginalized groups in our society by denying the funding they need to survive?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I guess it won't surprise you that I don't agree with the premise of the question.

There are quieter voices who want the government to spend more on health care delivery. There are quiet voices who want us to spend more money on immigration settlement.

You're a member from Toronto. I'm a member from Ottawa. They're both big cities in Canada. One of the things I'm proud of in our budget is that we took some of these savings to help pay for things like immigration settlement where the province of Ontario was getting a raw deal for many, many years.

Again, my premier fought hard to get the Liberal government to finally back down and treat Ontario fairly. I can remember he met well into the evening with the former prime minister, and I was the only member of Parliament on the Hill to fight for Ontario, to be there to support him that night.

So we're putting more into immigration settlement. And those are people with a quiet voice who have been disadvantaged, particularly in the province of Ontario for years. We had half the immigrants and we were getting 25% of the money and now we're going to get our fair share. I think that's important.

There's one example of a reinvestment to a group--talk about marginalized--a voice that hasn't been heard that's now being heard. I could give you more examples.

[Peggy Nash, NDP, Parkdale—High Park, ON]

But Minister Baird, if that's the case, then why aren't we investing more of this money into programs like literacy? And why are we cutting money from the youth employment program? This is a government, your government, that wants to get tough on crime, and yet programs that help marginalized young people take a first step into the workplace are being cut. There is no logic to it except that there is.... Or I ask you: is there an ideological basis for these cuts that they all seem so targeted on the most marginal people in our society?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Let me speak to you about the example that you raised about the youth employment program. There was a part of that specifically designated to youth at risk that we're not reducing funding towards. But it just didn't make sense to provide wage subsidies in parts of the country that are very close to full employment. There are summer jobs in many parts of the country at $10, $15, $20 an hour that went unfilled this past summer, so it just seemed odd for the federal government to be providing wage subsidies in these communities. There are other areas of the country where prosperity has not reached, where there's still an important role to play and the program will be there to do that.