Outsourcing: the new way to balance government budgets in Canada
TheStar.com – opinion/editorialopinion
Published On Tue Feb 21 2012. By Carol Goar, Editorial Board
Mayor Rob Ford outsourced Toronto’s budgetary woes to a consulting firm last spring. He didn’t pay KPMG much — $350,000 for a two-month review of the city’s core services — and he didn’t get much. The hired cost-cutters produced an “inventory of opportunities” almost all of which municipal bureaucrats had recommended and council had rejected in the past. It rejected most of them again.
Premier Dalton McGuinty handed off Ontario’s fiscal predicament more deftly. He appointed Don Drummond, a retired bank executive and former federal public servant, to come up with a plan to rein in provincial spending. He gave him 10 months to do a thorough job and paid him $1,500 a day. (Drummond billed for only 50 days). The premier got his money’s worth: a comprehensive restructuring plan for his government and those that follow. He also got an adviser willing to do what he had never done: tell Ontarians the whole painful truth and show them the consequences of inaction.
Prime Minister Stephen Harper quietly hired private consultants in late summer to advise his government on how to cut $4 billion. It’s unlikely taxpayers will ever know whether the $19.8 million contract to Deloitte was worth the price. In fact, the only way they know about the arrangement at all is that an enterprising journalist from the Canadian Press filed an Access to Information request.
All three levels of government have highly trained public servants who are paid to provide well-researched, impartial financial advice. Yet all three have turned to outsiders.
Not only does this raise questions about who is determining public priorities, it breaks the chain of accountability. Government employees are responsible to the people through their elected representatives. Consultants, commissioners and private-sector advisers are not.
It is sometimes necessary to bring in private contractors to provide specialized knowledge or technical expertise. But not for budgets. They are the direction-setting documents of government.
This was not always the case. The prime minister, premier or mayor provided an overview of a government’s plans and priorities, the budget filled in the numbers and the spending estimates provided a department-by-department breakdown.
But today, leaders’ speeches consist mostly of generalities. And spending estimates are rarely examined by Parliament. By default, budgets have become the road map to the future.
To ensure that they reflect the choices of the people — not just those of the leader — the budget-making process must be as transparent as possible, especially now as all three levels of government embark on retrenchment campaigns that will require difficult sacrifices.
Yet each leader has made — or tried to make — the process more opaque.
Ford didn’t succeed. His KPMG report set off such a fierce public backlash that city council, which had been supine for the previous eight months, challenged the mayor, forced him to jettison most of the cuts the consultants proposed and demonstrated that the city was in far less of a financial crisis than he claimed.
It is too early to tell whether McGuinty succeeded. Ontarians won’t know until his government presents its budget this spring. What is clear, however, is that commissioning the Drummond report allowed the premier to fight last fall’s election without telling voters how serious the province’s fiscal problems were or how deep the cuts that lay ahead would be. His government still has time to consult the public about Drummond’s recommendations, but so far there is no indication it plans to do that.
Harper has at least succeeded in confusing people. His chief cost-cutter, Treasury Board President Tony Clement, is now suggesting the government is looking for savings in the $8 billion range. He hasn’t said whether they will be unveiled in next month’s federal budget, in the spending estimates that follow or in some later announcement. Nor has he explained the role of the consultants.
It is true that Canadians gave their governments a mandate to balance their budgets. But they did not vote to outsource their future.
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