Vanishing Government Deficits

I am surprized that given the growing size of personal household debt, the  Federal governments Throne Speech had this statement: “Canadians live within their means and expect their government to do the same…” Hopefully, the government will aspire to do better than households, With household debt of $1.3 trillion, we are on the cusp of a major personal debt crisis.

Futile Budget Cuts
Futile Budget Cuts

The Canadian government plan to erase Canada’s $56 billion budget deficit through economic growth and spending freezes. There is no specific attention to major productivity improvement or cuts to major “spending drivers” (major projects and programs that generate costs). Rather they focus on spending cuts. That’s like trying to stop water from a tap by letting the water flow in cupped hands. It doesn’t work; especially when a major cost driver in government’s budget is health care, which performance governments measure by dollars spent. Our government is proud it won’t cut health care spending in this round of cuts. And of course, those on the left, addicted to spending, would cry foul if government cut total health care spending. What about more effective service delivery with yesterday’s cost or less? This is such a foreign concept to government!

Until we accept we can’t manage money but we manage spending drivers (people, policies, programs, projects), governments will continue to waste money. As a former CFO, I know “cutting budgets” is a time waster. We must monitor, manage, reduce, increase inputs that generate costs, such as goals, plans, and non monetary performance measures. We must expect the public and the left to disagree with targeted program efficiency improvement cuts. Successive governments have told them more money means more progress. Look at the long gun registry! Introduced by then Liberal Party’s Minister Rock at a gross cost of $119-million to build and run, with gun owners paying $117-million through registration fees, for a net cost of $2-million, today it is around $2 billion (yes, the first number is million, the second, billion). Like The Energizer Bunny, it keeps going …

Let’s pray our government understand the need for effective performance measures for programs such as health care. Pray they understand judging performance by spending increases is beyond stupid … it’s insane! Pray too, our government understand that the worst performance indicators are monetary. This is a management axiom: “if you can’t measure it, you can’t manage it.”

Michel A. Bell

Michel A. Bell is a former senior business executive, author of six books (including Business Simplified released in 2018), speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.