Mr. Chairman, I'd like to thank committee members for having me here today. It's always fun to come the Hill and appear, on the surface anyway, to defend the shooting of Bambi.
I'll be happy to answer questions with respect to specific programs—why, for example, it's not necessary to fund literacy advocacy, or why it's not correct or necessary to provide wage subsidies in some of the hottest markets in the country—or the role of the federal government vis-à-vis provincial governments in delivering some of these services or programs.
I'm actually going to start today by really taking us up to a macro level, perhaps as a starting point, but as I said, I'll be happy to answer questions afterwards.
I found that it was a bizarre line of attack on the government's plan to chop a billion dollars over the next two years and then find another billion dollars in efficiency savings over the same period. Opposition members questioned the necessity of trimming fat when the government is in fact sitting on bags and bags of surplus dollars. In fact, what the opposition was telling Canadians is that using tax dollars responsibly is just not a priority when the federal government is swimming in excess money. It seems to them and their supporters that a surplus means Ottawa can afford to fund everything and anything, regardless of necessity. This is an absurd belief, but it does explain why the previous Liberal government was a far better steward of tax dollars when faced with annual deficits than when handling surpluses.
When in the red, the Liberal government had to make choices and spend more prudently, which they did, and our organization commended the previous government for its commitment to balancing the budget and pulling this country out of deficit. When the Liberals assumed office in 1993, program spending, which is government spending on everything except debt interest, stood at $122 billion a year. In 1999, program spending was $119 billion, or 3% lower. Holding down the size of government was an impressive accomplishment requiring fiscal discipline. It resulted in a more resourceful federal government.
Moderate budget surpluses were recorded beginning in 1997, but the cash really started to tumble in when the surplus hit $14 billion in 1999. Spending soared with this turnabout. In 2004, program spending hit an all-time high of $176 billion, an eye-popping 48% increase in just four short years.
Excess tax revenues do not give lawmakers licence to start wasting money. Canadians understand that saving diligently and living frugally are what underpins wise financial planning. Finance Minister Jim Flaherty and Treasury Board President John Baird are to be congratulated for trimming program spending, albeit by a tiny amount. Let's not forget, a billion-dollar cut represents approximately half of 1% of Ottawa's total program spending.
Similarly, it was pleasing that the Conservative government reported that program spending fell to $175 billion last year. This was actually a drop of $1.1 billion versus the 2004 fiscal year. The reduction marked Canada's first year-over-year decline in nine years. Government shrunk and the sky did not fall.
Regarding the spending reductions that were announced, I think there was a credible case made that they really fell under three categories. The first was duplicate, redundant spending that was refocused on priority areas. Number two, the money simply was not used. It was lying around in bank accounts. In fact, this was one way the previous government was able to report surpluses at year end: by looking at this excess money, banking it, and often applying it against the debt. The Conservatives have in fact adopted the policy of the previous government in both these cases.
The third one, though, is the one we're really talking about today, and that is cutting the funding of advocacy organizations in this country. There is a belief in this town that not-for-profit organizations expect a constant draw from the government to fund themselves so that they can then go out and promote their pet causes.This is one area where the new government has actually not done enough in terms of pulling back some of this funding. I don't believe an advocacy organization that is Conservative, Liberal, left, right, or you name it, is entitled to turn to the federal government and demand its funding so that it can then go out and push its pet cause in public.
So I'll leave it at that. Those are my brief remarks, but as I said, I'm happy to address any of the programs that were reduced within this department.
Thank you.