* Jocelyne Bourgon, who oversaw former prime minister Jean Chrétien’s massive budget cuts in the ‘90s, says Prime Minister Mark Carney should avoid across-the-board cuts commonly used by past Canadian governments, and the kind of indiscriminate budget slashing happening south of the border.
* Bourgon, who has advised several governments on how to make big budget cuts, says it’s a political exercise, not just a fiscal one, and that making difficult choices is key.
>As governments around the world look to cut their spending in an increasingly uncertain economy, the United States—and Canada—stand out as examples of what not to do.
>That’s according to the woman who steered the Canadian public service through one of the most dramatic budget cuts in the country’s history.
>“In the 1990s, Canada was facing a fiscal crisis. It was losing its capacity to invest in the future of its choice,” Bourgon said in an interview with *The Logic*. The government’s debt ballooned to the point that a third of tax revenue was being used to pay it off.
>Bourgon helped lead a massive program review that cut department spending by an average of 20 per cent and, in 1998, allowed then finance minister Paul Martin to table the country’s first balanced federal budget since 1969, with a surplus.
>Now, Prime Minister Mark Carney is hoping to pull off a similar feat.
>“Today, Canada is facing an economic sovereignty crisis,” Bourgon said*.* “It is losing the capacity to have the degree of flexibility and independence to make the economic choices that would ensure future prosperity.”
>Unlike corporations, which can review their operations, see what’s working, what best services new priorities and cull the rest, governments have another major factor to consider: politics.
>In a bid to bolster Canada’s economic sovereignty, Carney has given himself the tall task of balancing the government’s daily spending in three years while at the same time putting billions more into Canada’s [military](https://thelogic.co/briefing/carney-commits-canada-to-spend-5-of-gdp-on-defence-by-2035/) capabilities and housing. He plans to do it with less revenue, after cutting income taxes, removing the GST from the sale of some new homes, and repealing plans for a digital services tax and a capital gains hike. He’s also promised not to touch transfers to provinces and to protect existing social programs.
>Finance Minister François-Philippe Champagne sent [letters](https://www.theglobeandmail.com/politics/article-federal-cabinet-ministers-letters-spending/) to ministers last month to demand they reduce existing spending in their departments by 15 per cent over the next three years, and make sure all programs serve the prime minister’s new economy-focused mandate. The minister will also evaluate new spending against the new priorities.
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* Jocelyne Bourgon, who oversaw former prime minister Jean Chrétien’s massive budget cuts in the ‘90s, says Prime Minister Mark Carney should avoid across-the-board cuts commonly used by past Canadian governments, and the kind of indiscriminate budget slashing happening south of the border.
* Bourgon, who has advised several governments on how to make big budget cuts, says it’s a political exercise, not just a fiscal one, and that making difficult choices is key.
>As governments around the world look to cut their spending in an increasingly uncertain economy, the United States—and Canada—stand out as examples of what not to do.
>That’s according to the woman who steered the Canadian public service through one of the most dramatic budget cuts in the country’s history.
>From 1994 to 1999, Jocelyne Bourgon was Jean Chrétien’s clerk of the Privy Council, the government’s top bureaucrat responsible for advising the prime minister and his cabinet, acting as his general as the country teetered on the edge of market [implosion](https://www.reuters.com/article/business/how-canada-tamed-its-budget-crisis-idUSTRE7AK183/).
>“In the 1990s, Canada was facing a fiscal crisis. It was losing its capacity to invest in the future of its choice,” Bourgon said in an interview with *The Logic*. The government’s debt ballooned to the point that a third of tax revenue was being used to pay it off.
>Bourgon helped lead a massive program review that cut department spending by an average of 20 per cent and, in 1998, allowed then finance minister Paul Martin to table the country’s first balanced federal budget since 1969, with a surplus.
>Now, Prime Minister Mark Carney is hoping to pull off a similar feat.
>“Today, Canada is facing an economic sovereignty crisis,” Bourgon said*.* “It is losing the capacity to have the degree of flexibility and independence to make the economic choices that would ensure future prosperity.”
>Unlike corporations, which can review their operations, see what’s working, what best services new priorities and cull the rest, governments have another major factor to consider: politics.
>In a bid to bolster Canada’s economic sovereignty, Carney has given himself the tall task of balancing the government’s daily spending in three years while at the same time putting billions more into Canada’s [military](https://thelogic.co/briefing/carney-commits-canada-to-spend-5-of-gdp-on-defence-by-2035/) capabilities and housing. He plans to do it with less revenue, after cutting income taxes, removing the GST from the sale of some new homes, and repealing plans for a digital services tax and a capital gains hike. He’s also promised not to touch transfers to provinces and to protect existing social programs.
>Finance Minister François-Philippe Champagne sent [letters](https://www.theglobeandmail.com/politics/article-federal-cabinet-ministers-letters-spending/) to ministers last month to demand they reduce existing spending in their departments by 15 per cent over the next three years, and make sure all programs serve the prime minister’s new economy-focused mandate. The minister will also evaluate new spending against the new priorities.
!ping Can&Administrative-state