CUTBACK MANAGEMENT IN CANADA
: Although since 1975 the Government of Canada has been successful in containing its expenditure growth — partly as a result of the demands for value for money in government and the political implications of the large deficit — the drive for efficiency and economy has a long history. The Budget reforms of the 1970s (such as MBO, PPB and OPMS) have been joined at the Federal level by a new Policy and Expenditure Management System based on resource “envelopes”. This involves the preparation of a five-year fiscal plan setting out projected revenue and total expenditure with a division of expenditure into ten “envelopes” for ten policy sectors. Expenditure priorities are determined by the Priorities and Planning Committee chaired by the Prime Minister, and five Cabinet Committees are responsible for managing the various policy sectors within the funds available. The intention is that “X-budgets”, or across-the-board percentage cuts which were the earlier means of cutting back, will be replaced by the more sophisticated “envelope” system. In various ways all Provincial governments — even resource-rich Alberta — have also cutback their expenditures. Ontario has used two blunt instruments in its cutbacks; an arbitrary growth target below the level of inflation and the limitation of public service manpower through the device of “person-years”. The lesson from Ontario's experience is the importance of political will in cutback management.