McLeod Group Blog

Ignorance is Strength: Good Financial Management at Work

Ignorance is Strength: Good Financial Management at Work

McLeod Group Blog, December 22, 2014

According to George Orwell’s Ministry of Truth, ‘War is peace. Freedom is slavery. Ignorance is strength.’ In the Harper government’s brave new world, bad financial budgeting is good financial management.

That’s the only conclusions you can draw from government departments that planned and over-budgeted so badly in 2013-14 that they were able to return $7.2 billion in lapsed funds to the treasury. Treasury Board President Tony Clement calls this incredible mess ‘a sign of good management.’

It is nothing of the kind. The lapsing funds result from ministers simply refusing to OK spending plans. Stephen Harper isn’t balancing the books through careful management; he’s doing it by throttling every department in sight: the RCMP, Veteran’s Affairs, Employment and Social Development Canada, even the security budget of the Department of Foreign Affairs, Trade and Development.

Programs, projects, new initiatives, longstanding commitments… nobody has any idea whether they will go ahead or not. Those responsible for carrying out the day-to-day work of the government are told ‘Soon’ or ‘It’s on the minister’s desk’—which is Harper-speak for ‘Never.’ The minister’s desk is where too many of the federal government’s responsibilities go to die.

Foreign aid spending is one of the worst examples of lapsing funds. Not happy with simply slashing the aid budget, which is now headed in the direction of an all-time historical low, a bunch of heroic Development Ministers have simply ignored the projects placed on their desks for signature. Bev Oda, CIDA Minister from 2007 to 2012, underspent on everything except orange juice and tied the CIDA approval process in Nots. Julian Fantino, Minister for International Cooperation between 2012 and 2013, helped ‘fold’ CIDA into DFAIT and tightened up on the Oda strangulation technique. Christian Paradis, the current minister, has made a better show of banging the pipes, but the taps remain on trickle.

The government acknowledged that about $170 million in Canada’s aid spending lapsed last year (check the DFATD 2013-14 ‘Performance Report‘ if you have a magnifying glass). This follows $419 million unspent the previous year. That is more than ten percent of an already slashed budget. It means projects delayed, promises unmet, opportunities squandered. And what that means in real terms is farmers missing a planting season, children unvaccinated, schools not built and delivery mechanisms wrecked because salaries cannot be paid. This ‘good financial management’ is taking a tremendous toll in the lives of real people who live and work on the edge of disaster. The truth about this kind of financial management is that nobody—not the governments of developing countries, not UN agencies, not NGOs on the front lines, not even ordinary people—can count on the government of Canada to do what it says it will do.

Despite the drop in oil revenues, the government is still touting its long-promised surplus for 2015, and the vultures are gathering with all kinds of bright ideas about how it can be spent. The government recently announced a ‘historic investment to transform and revitalize the National Arts Centre.’ This isn’t just historic, it’s a statement of government priorities in an Orwellian world: $110 million for a snazzy new entrance to the building (useful, no doubt), and a lot less for poverty reduction in developing countries—plans thrown carelessly away through meanness, inaction and thoughtless financial management.