Finance Minister François-Philippe Champagne has announced plans for the cabinet committee on internal savings to focus on federal contracting in the new year, as part of a broader initiative to identify $60-billion in government savings. The committee, which Champagne chairs, has spent the past year evaluating proposals from various departments on how to reduce day-to-day spending and allocate more funds towards infrastructure projects.
Exploring ‘Horizontal Efficiencies’
The committee’s initial focus was on ‘vertical’ savings, which involved identifying cost-saving measures within individual departments. “A lot of the things we did were vertical,” Champagne stated, indicating the committee’s next objective is to find ‘horizontal’ efficiencies that extend across the government. This will involve exploring ways to leverage artificial intelligence and extract better value from vendors, while also promoting a ‘Buy Canadian’ approach.
Maximizing Government Purchasing Power
Champagne emphasized the need for the government to utilize its purchasing power to decrease costs across federal agencies. This approach forms part of the committee’s ‘next mission’, which aims to find savings and enhance efficiency across the entire government. This initiative aligns with Prime Minister Mark Carney’s goal of reducing government spending to fund infrastructure projects.
The Challenge of Meeting Savings Targets
Champagne’s first budget as finance minister projected a rise in the federal debt-to-GDP ratio, reflecting a shift from a downward trend. However, it also demonstrated a commitment to spending restraint, announcing plans to reduce the public service workforce by 30,000 people, in addition to a 10,000-worker reduction slated for 2024-2025.
Despite these measures, the government’s ambitious target of $60-billion in savings presents a considerable challenge. As Champagne points out, “Look, $60-billion is ambitious… We’re going to be focusing on delivering what we have set for ourselves.” Even with a focus on both vertical and horizontal efficiencies, the path to achieving this target is not without obstacles.
What Lies Ahead
Champagne’s budget outlined some specific cost-saving measures, from adjusting medical cannabis benefits to divesting equipment nearing the end of its service life. However, the full details of how these savings will be achieved remain to be seen. Federal departments are only just beginning to reveal the specifics of their plans, and public sector unions have voiced concerns over the lack of detail and consultation.
As the new year unfolds, the committee’s focus will shift towards federal contracting and other cross-government areas. The ultimate goal is to deliver on their ambitious savings target, while continuing to fund vital infrastructure projects and maintain essential public services.
