Canada’s Liberal government could save $10.7 billion this fiscal year alone by eliminating eight ineffective federal spending programs, says a new report by the fiscally conservative Fraser Institute.
The study, “Identifying Potential Savings from Specific Reductions to Federal Government Spending,” by Jake Fuss and Grady Munro, cites eight federal programs where it says “government spending does not appear to be accomplishing its stated goals, or where government spending is unnecessary.”
“Canada’s federal finances have deteriorated markedly over the last decade largely due to a rapid run up in spending, deficits and debt,” said Fuss.
“A comprehensive line-by-line review of Ottawa’s spending is required to identify those programs or initiatives that are not fulfilling their purpose, or are not providing good value for tax dollars.”
The eight programs with their current annual budgets identified by the Fraser Institute as failing to do what Prime Minister Justin Trudeau and the Liberals claimed they would, totalling $10.7 billion in the 2024-2025 fiscal year are: Regional Development Agencies ($1.5 billion); federal Two Billion Trees program ($340 million); federal support for electric vehicle production and purchases ($586.7 million); Canada Infrastructure Bank ($3.5 billion); Strategic Innovation Fund (S2.4 billion); Green Municipal Fund ($530 million); federal support for journalism ($1.7 billion); Global Innovation Clusters ($202.3 million).
Among other criticisms of these programs, the Fraser Institute study notes that, “despite research suggesting business subsidies do little to promote widespread economic growth, the seven regional development agencies (with 1,977 full-time staff) report vague objectives and results that make it difficult for government officials or Parliamentarians to assess the efficacy of the spending.”
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Since the Canada Infrastructure Bank was established in 2017, the report says, “it has approved up to $13.2 billion in investments across 76 projects, but only two projects have been completed. These projects represent just $93.2 million (or 0.71%) of the total approved investments.”
An audit of the Two Billion Trees Program by the federal environment commissioner, the Fraser Institute study says, “found that the government is unlikely to reach its two billion trees objective or achieve the expected emission reduction targets,” falling “well short of its planting goal in 2022 and .. only on track to plant 2.3% of the two billion trees planned within the program’s first two years of operation.”
This “despite the federal government (is) spending $480.5 million, or roughly, 15% of the total amount earmarked for the 10-year program, between 2022–23 and 2023–24.
“The auditor also raised concerns that the government is using trees planted under a different program —the Low Carbon Economy Fund (LCEF) under the Department of Environment and Climate Change — to artificially boost its numbers and make it appear as if the government is achieving its planting targets under this specific program.”
The Fraser Institute study also says that “despite having clear emissions reduction targets, “ many of the projects approved for funding under the Green Municipal Fund, “appear to have no quantifiable impact on reducing GHG emissions. According to the GMF’s most recent annual report, more than half of the projects approved under the Low Carbon Cities Canada initiative in 2022–23 will generate no quantifiable emissions reductions. Examples … include ‘climate-friendly’ home tours, mentorship programs for ‘the next generation of climate leaders,’ and funding for climate advocacy groups in Ottawa.
“Though just a starting point, a savings of $10.7 billion would meaningfully improve federal finances and help Ottawa put the country’s finances back on a stable footing,” Fuss said