A quick skim through the 2012 Federal budget

Just some thoughts:

  • Total spending is $276B (17% of GDP). Deficit: $33.4B (1.2% of GDP). Spending, revenues, and debt charges are all forecast to continue rising until at least 2016, when the federal debt will be unchanged at $602B.
  • I can’t find any mention of tax increases (quel surprise), but they predict spending to go up while the deficit goes down. This requires economic growth and increased employment to provide greater revenues at the same tax rates. The budget gives numbers (Statement of Transactions, p 238) that allow a calculation of the assumed GDP over the coming years. They assume an average year-on-year growth of 2.11% in real GDP (2011 dollars), or 4.16% nominal. Both are in line with private sector forecasts reported in the budget document. Budgetary revenues, however, are expected to grow at an average 4.74% (nominal).
  • The budget only mentions space activities in two contexts. First,the continued participation in the ISS program, which was announced ahead of the recent heads-of-agencies meeting in Quebec. Second, there’s money for Natural Resources Canada to improve its ground station infrastructure, mainly for Radarsat.
  • The Canadian Space Agency gets a cut of $8M this year, and $30M thereafter. From what I can tell, this represents more or less a return to the (nominal) level of funding CSA had prior to the ‘stimulus’ money of 2008-2011 (ie, the Exploration Surface Mobility program and related spending), which was $110 over 3 years. So it’s not a major cut, beyond what was already expected; everybody knew the stimulus money was going to end, well, this week actually. In any case, it will be a while before we know what the return to this level will mean for CSA-supported programs; the Agency’s detailed budget is not part of this document.
  • The government reviewed program spending of $75.3B, and cut $5.2B, or 6.9%, of that. The budget document lists, of this, the savings anticipated per department. It doesn’t, however, make it easy to see the context or relative magnitude of these cuts — the budgets of each department aren’t at hand. The cuts include:
  • $26.9M now, $166M later in Aboriginal Affairs and Northern Development, including to its dedicated statistics agency. There’s a mention of ‘devolution of responsibilities to the Northwest Territories’.
  • $7.5M cut from the Chief Electoral Officer (with whom the current governing party has had continual conflict) immediately, and $6.7M from the Auditor General 2 years hence. $0.7M from the Privacy Commissioner, exactly no change to Official Languages.
  • Consolidation in the agriculture and agri-food portfolio, including merging the laboratory and science functions of Agriculture and Agri-Food Canada and the Canadian Food Inspection Agency. The government will ‘change how the CFIA monitors and enforces non-health and safety food labelling regulations’, and ‘repeal regulations related to container standards to enable industry to take advantage of new packaging formats and technologies, while removing an unnecessary barrier for the importation of new products from international markets’
  • They expect to save a quarter of a billion dollars within a few years by finding efficiencies and cheaper service delivery at the Canada Revenue Agency. It also sounds like there may be some outsourcing of work: ‘the Agency will leverage the expertise of tax professionals to improve the effectiveness of its operations.’
  • $30M in unspecified efficiencies at Citizenship and Immigration.
  • More ‘streamlining’ and ‘efficiencies’ in the Environment portfolio. People who’ve been watching this government’s interactions with environmental groups and related lobbyists may be amused by this statement announcing a body to be shut down: “For example, while the National Round Table on the Environment and the Economy (NRTEE) filled an important need in the past, a mature and expanded community of environmental stakeholders has demonstrated the capacity to provide analysis and policy advice to the Government.” That free advice will save them the NRTEE’s $5.2M budget, starting next year.
  • One- and two-dollar coins to be made form cheaper materials (plated steel compared to the current alloy composition), and the one-cent coin to be phased out.
  • DFO to transfer responsibility for arctic ports to the territorial governments, which along with reducing its land vehicle fleet would seem to save it $79M within a few years. One wonders if the territorial governments, with their tiny tax bases, will have any better luck shouldering that burden than municipalities across the country did when Transport Canada transferred responsibility for airports to them in the ’90s. All we ended up with are every city trying to market its own crumbling airport, navigational beacons that need (but will probably never get) repairs, and closing of runways, aprons, and whole fields to cut costs.
  • DFAIT will sell off some overseas assets and equipment, and ‘Canada will also examine its participation in some international organizations to ensure that they are relevant to Canada‚Äôs interests and priorities.’
  • Consolidation between Health Canada and the Public Health Agency of Canada, and absorption by HC of the functions of Assisted Human Reproduction Canada (fact: I did not know this agency existed. HC can presumably handle its roles).
  • The CBC to see a 10% cut in funding. This is on top of previous reductions over the last few years. I suspect this will strain the broadcaster’s plans to increase regional programming, and to maintain core program funding.
  • NSERC to see $15M in cuts this year, more later; the NRC cut by $16.3M next year.
  • Unspecified cuts to Statistics Canada.
  • $180M cut from international aid, and what sounds like a major restructuring of CIDA
  • Significant reductions (hundreds of millions) at DND, following the wind-down of the Afghanistan mission.
  • Natural Resources Canada and the Canadian Nuclear Safety Commission will reduce or eliminate activities of low relevance, effectiveness, efficiency, or affordability.” But don’t worry, “These changes will not have an impact on the health, safety and security of Canadians and the environment.”
  • An explicit statement that they won’t build new prisons. Let’s see what the provinces have to do in response to the criminal code reforms.
  • Mention of a single GC-wide IT system to cut costs.
  • No major cuts announced to VIA Rail.

  • Anyway, that’s just the program review. Other major areas to look at are the report on the stimulus program, and the proposed industrial and innovation strategy.

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