COVER

Exposing Big Government

MICHAEL ROSE March 24 1986
COVER

Exposing Big Government

MICHAEL ROSE March 24 1986

Exposing Big Government

COVER

When reporters crowded into Parliament’s Railway Committee Room last week for an advance look at a long-awaited study of waste and inefficiency in almost 1,000 federal government programs, they encountered the kind of elaborate security usually reserved for federal budgets. But while budgets can have an immediate effect on taxpayers and the stock market, the impact of the 21-volume study carried out by a task force under Deputy Prime Minister Erik Nielsen was likely to be far less immediate. Even though the massive study proposed sweeping measures to reorganize or eliminate government programs, Nielsen moved swiftly to reassure those who saw the suggestions as a prelude to a dramatic round of spending cuts. The proposals, insisted Nielsen, did “not represent government policy, nor are they decisions of the government.” Indeed, if Prime Minister Brian Mulroney’s government decided to adopt the task force’s more draconian recommendations, it would create an unprecedented upheaval in services Canadians have come to expect. Admitted the report’s authors: “Every Canadian is affected in one way or another by the programs studied.” In their year-long examination into tax breaks and about

$92 billion worth of Ottawa’s current annual spending programs—both defence and foreign aid were exempt from scrutiny because the report focused only on services directly affecting Canadians—the 221 civil servants and private sector volunteers working under Nielsen uncovered alarming evidence of mismanagement. Among the chief findings:

• Federal spending is “out of control” because too many politicians and civil servants fail to understand the total impact of hundreds of programs, tax breaks and regulations they administer.

• Under an “overly rich and overlapping” network of subsidies and tax breaks for business that was worth $16.4 billion in 1985, Canadian firms have become “program junkies.” While Ottawa gives “with both hands,” the funding produces dubious economic results.

• Systems for evaluating programs are “generally useless,” and programs are rarely challenged or eliminated because “self-serving” civil servants want to preserve the status quo.

• Between $40 and $60 billion worth of government real estate, including harbors, airports and buildings, are “undermanaged and overstaffed” and many properties should be sold off to other governments or the private sector.

Buried in the thick volumes of find-

ings were dozens of specific recommendations for different approaches to, or elimination of, programs covering everything from prisons and national parks to the Canadian Broadcasting Corp. and native affairs.

Although the report recommended ways of improving social programs—including turning halfway houses for paroled prison inmates over to private enterprise—the task force conceded that Canada’s poor and disadvantaged “are in fact needy.” And it recommended that established welfare programs be left in place. Still, opposition politicians swiftly depicted the report as an attempt by the government to justify radical changes in so| cial services. New Demo| cratic Party Leader Ed Broadbent vowed to fight any cuts in “people programs.” Liberal Leader John Turner declared that “efficiency cannot be achieved on the backs of the poor, the aged, the unemployed or our young people.”

While the Tories tried to distance themselves from the more controversial proposals, some recommendations have already been implemented. Parts of the report were in the government’s hands before the May, 1985, federal budget, which cut $1.8 billion in spending and curtailed a number of tax breaks, such as the widely abused scientific research tax credit. Other measures not requiring major legislative changes, including new policies for subsidized low-income housing, have been quietly adopted since last summer. And parts of Finance Minister Michael Wilson’s budget last month were clearly inspired by still other recommendations.

Wilson ordered a $500-million cut in departmental budgets this fiscal year, a freeze on year-end discretionary spending by bureaucrats, an indefinite salary freeze for senior civil servants and the elimination of some corporate tax breaks. Private sector task force members said they had felt “no inhibitions about posing awkward questions or advocating uncongenial solutions where necessary.” Now, the Mulroney government will have to decide if it is willing to risk voter anger and press ahead with some of the radical proposals—to make more efficient use of taxpayers’ money.

— MICHAEL ROSE in Ottawa