A comprehensive review of federal government spending is required
The federal government should do a comprehensive review of its spending and axe eight of its programs that are ineffective, according to a new report.
Jake Fuss, director of fiscal studies at the Fraser Institute – which also recently took aim at the government’s plans on housing affordability - says that with a deterioration in federal finances over the past decade “largely due to a rapid run up in spending, deficits, and debt” the government should take some major decisions to ensure value is being delivered for taxpayers.
"As previous governments have done before, 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,” he said.
Fuss’s analysis of programs identifies eight that should be scrapped because they either do not appear to be meeting their goals, or where government funding is unnecessary.
These are the funds, the cost, and why the report suggests they should end:
- Regional Development Agencies ($1.5 billion): These agencies show vague objectives and limited measurable success in economic development.
- Government Supports for Journalism ($1.7 billion): Despite funding, traditional media continues to decline, and large-scale layoffs persist.
- Federal Support for Electric Vehicles ($0.6 billion): EV subsidies are deemed inefficient and benefit wealthier households disproportionately.
- 2 Billion Trees Program ($0.3 billion): The program is unlikely to meet its planting and emissions reduction goals.
- Canada Infrastructure Bank ($3.5 billion): Since 2017, only two out of 76 projects have been completed, representing just 0.71% of approved investments.
- Strategic Innovation Fund ($2.4 billion): Limited impact on innovation and potential crowding out of private investment.
- Global Innovation Clusters ($0.2 billion): The program has not met its ambitious GDP growth targets, and funding allocation may be politically influenced.
- Green Municipal Fund ($0.5 billion): Many funded projects lack measurable greenhouse gas reduction impacts.
Ending all of these could cut $10.7 billion in government spending in 2024-25 alone.
"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.
The non-partisan Fraser Institute has also been urging Ottawa not to change the rules on Capital Gain Tax, warning that it would harm Canada’s competitiveness.
