Issued jointly with the Department of Finance.[ Backgrounder ]December 16, 2003OTTAWA - An extensive review of government spending and immediate measures to control costs will ensure the government has the flexibility to meet the priorities of Canadians, Treasury Board President Reg Alcock and Finance Minister Ralph Goodale said today."We have taken immediate steps to find savings in the current fiscal year," Minister Goodale said. "We will take every step possible to ensure that we are able to provide the $2 billion health transfer to the provinces and territories without going into deficit."To control costs, the government has ordered:An immediate freeze on major capital projects, subject to decisions of the cabinet committee on Expenditure Review;An immediate freeze on reclassifications (the movement of employees into higher pay scales without changing jobs);A freeze on the size of the public service; andDetailed scrutiny of every expenditure that remains to be made in the next three months."One of the key objectives of this government is to restore Canadians' trust - and to do that we need to show Canadians that we treat their tax dollars with respect and care," said Minister Alcock.The government will achieve the $1 billion in annual savings through reallocation that was outlined in Budget 2003. The President of the Treasury Board has been tasked with meeting this commitment.In addition, cabinet's Expenditure Review Committee - to be chaired by Minister Alcock - will conduct an extensive and rigorous review of all government spending, to report in autumn 2004 for implementation in the 2005 budget.The review will create a cycle of continuous management improvement and the pursuit of excellence in the public service. Resources will be reallocated from the old to the new, from the good to the better. The committee starts work tomorrow."This will help foster a new management culture in government," Minister Alcock said.The Expenditure Review Committee will consider government programs as well as other issues that contribute to government expenses such as human resource management, procurement, capital management and other issues to be identified by the committee. Every effort will be made to ensure that parliamentarians are involved and that the views of Canadians in general are taken into account.Over the longer term, the review will allow the government to find the resources to fund its ambitious agenda of strengthening the social foundations of Canadian life, building a 21st century economy, and ensuring Canada's place in the world.In contrast to previous reviews, all government spending will go under the microscope. There will be no exceptions.This expenditure review will:Be a two-stage approach, focusing first on each program's relevance, and then on whether any proposed adjustments are sustainable over the long term.Place greater emphasis on initiatives and services that cut across a number of departments, with the aim of reducing overlap and ensuring maximum value for money.Include built-in monitoring and follow-up to ensure implementation.All ministers will be required to discuss with the committee the policy purpose and effectiveness of their department's programs and present options for the future, including cancellation, reduction or structural change.All program spending will be tested against a series of specific questions. The committee will want to know, for example, whether the program provides maximum value for money and whether the federal government needs to be involvedat all. A backgrounder on the details is attached. -30-For more information, contact:Mario BarilMedia RelationsTreasury Board of Canada Secretariat(613) 957-2391Andrée HoudePublic Affairs and Operations DivisionDepartment of Finance(613) 996-8080IF THERE IS A DISCREPANCY BETWEEN ANY PRINTED VERSION AND THE ELECTRONIC VERSION OFTHIS NEWS RELEASE, THE ELECTRONIC VERSION WILL PREVAIL.TTY(Telecommunications device for the hearing impaired) - (613) 957-9090BackgrounderProcess of the newly createdExpenditure Review CommitteeThe Expenditure Review Committee has been mandated to undertake a full review of all government expenditures as well as other issues that contribute to government expenses, including human resources management, procurement, capital management and other areas the Committee may identify.While Treasury Board will continue to deal with government spending proposals and management issues on an ongoing basis, the Expenditure Review Committee will do a full-scale review of spending with a view to reporting next fall. In carrying out its duties, the Committee will actively seek the input of parliamentary committees and citizens.The expenditure review will be an on-going activity and it will be expected that departments and other appropriation dependent organizations report annually to the Treasury Board on the implementation of program review decisions, and fully identify and explain all variances from their commitments.The Treasury Board will be responsible for monitoring expenditure patterns and expenditure growth. It will also ensure the ongoing integrity of departmental corporate governance and comptrollership capacity, capital stock and information management systems.The Treasury Board will also be mandated to identify recent spending decisions with significant capital components to refer them to the Expenditure Review Committee for further consideration. In the interim, Treasury Board will not approve any contract or spending authorities for these initiatives until they have been confirmed by the Committee.A secretariat, established within the Treasury Board Secretariat, will be providing support to the Expenditure Review Committee.Program spending will be assessed against specific tests:1. Public Interest Test - Does the program area or activity continue to serve the public interest What public policy objectives is the initiative designed to achieve?How does it align with current government priorities and the core mandate of the organization?2. Role of Government Test - Is there a legitimate and necessary role for government in this program area or activity Governance - who else is involved, is there overlap and duplication?3. Federalism Test - Is the current role of the federal government appropriate, or is the program a candidate for realignment with the provinces? What are the initiative's impacts on other levels of governments? Could they play a greater role?4. Partnership Test - What activities or programs should or could be transferred in whole or in part to the private/voluntary sector? What are the initiative's impacts on the private and/or voluntary sectors and/or other key stakeholders? Could they play a greater role?5. Value for money Test - Are Canadians getting value for their tax dollars? Results: what is the evidence that the initiative is achieving the stated policy objectives?Is the program citizen-centred?6. Efficiency Test - If the program or activity continues, how could its efficiency be improved? Efficiency and Effectiveness: Does the program exploit all options for achieving lower delivery costs through intelligent use of technology, public-private partnership, third-party delivery mechanisms, and non-spending instruments?7. Affordability Test - Is the resultant package of programs and activities affordable? If not, what programs or activities would be abandoned? Relativity and Performance: How do program delivery costs compare to those in other jurisdictions and the private sector for similar activities?Sustainability and Stewardship: What actions have been taken to manage future spending pressures? What more can be done?
