Province looking to cut 30 per cent spending

Published on January 20, 2016

Finance Minister Cathy Bennett speaks to reporters Wednesday afternoon.

©Rhonda Hayward/The Telegram

Update: Finance Minister Cathy Bennett now says that public service layoffs are “on the table” to deal with the province’s massive fiscal crisis.

As it prepares to present a budget this spring, the government is looking for proposals to slash up to 30 per cent of spending over the next three years, according to an internal document obtained by The Telegram.

Government departments, agencies, boards and commissions (ABCs) are asked for proposals to make big cuts, in guidelines from the Government Renewal Initiative, which is steering the budget planning process.

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“The Government Renewal Initiative is requesting departments and ABCs to identify savings totaling 30 per cent of their 2015-16 expenditures over the next three fiscal years,” the document says. “A specific target has not been set for each year, but departments and ABCs should be prepared to implement accepted proposals as early as possible.”

Hit by falling oil prices and a structural deficit, the provincial government is currently nearly $2 billion in the red, and Premier Dwight Ball has said he’s consulting with the public for ideas on how to raise revenue and cut spending.

After news of the 30 per cent document broke, Bennett spoke to reporters at Confederation Building and said the target is a “blue sky” number to make sure that every possible option is considered.

Among those options, she said, the government must now look at public sector layoffs.

It was only in November, when the Liberals were running in the general election, that they categorically promised there would be no layoffs.

Bennett said no decisions have been made, but given the enormity of the problem, everything must now be considered. At the time when Bennett was speaking, Brent crude oil was trading for less than $28 per barrel.

Also Wednesday afternoon, Progressive Conservative Opposition MHA Steve Kent issued a news release criticizing government for spending too much money on a flashy public event to unveil a new tourism ad for the province.

Kent’s release said that the government spent nearly $8,000 on the event, including a $1,000 performance fee for the singing duo Fortunate Ones, and more than $5,000 in audio and visual staging gear from Eastern Audio. The Opposition release also said the government spent $493.93 on refreshments.

“In tough times, most people would describe a launch party as discretionary,” Kent said in the release. “If the government had been serious about making every dollar count, why would it have spent thousands to host a tea party with a few dozen people, when it could have saved money by simply holding a news conference in the government’s media centre and launched the campaign through its existing YouTube channels and other social media.”