Ottawa embraces higher user fees, holds to no tax hikes

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The Conservative government is counting on higher user fees as part of its deficit-fighting plan even as Prime Minister Stephen Harper boasts that he won't raise taxes.

It's a distinction that may be lost on many Canadians, but the government is insisting there's a difference.

Erasing the deficit and cutting taxes were the twin pillars of Mr. Harper's election campaign and ensuing budget. Now, day by day, new details are beginning to trickle out in terms of the impact this program will have on Canadians.

In a closed-door speech Wednesday afternoon to federal public service executives, Treasury Board President Tony Clement gave his first outline of the government's strategic and operating review that he will lead this year to find "at least" $4-billion a year in ongoing savings.

The process is a central feature in the government's plans to erase the deficit by 2015.

He said departments are being asked to develop two proposals for cabinet to consider: one that involves a 5-per-cent cut and another for a 10-per-cent cut. The focus of the cuts can encompass all operating expenses, including wages, salaries, contracts and grants.

"We are encouraging departments to develop a full range of options in areas such as administrative and program efficiencies, business consolidation and user fees," he said, according to a prepared text of the speech.

At least one branch of government is already preparing the groundwork for new legislation that would hike user fees in the agriculture sector. The Canadian Grain Commission recently completed consultations that will pave the way for a doubling of user fees to certify the quality, safety and weight of Canadian grain.

An association primarily made up of Prairie farmers, called the Inland Terminal Association, is opposing the hike as a "massive" new price increase on grain producers.

"Even though we would like to see the fees not increase, I have to admit that it's probably something [the Conservatives]have the political capital to do without changing their popularity very much," said Kevin Hursh, the association's executive director.

Mr. Clement's speech provides no further detail as to what user fees are under consideration.

However, the Conservative government raised user fees last year for airline travellers, to pay for heightened airport security. Other potential areas where user fees apply include campground bookings at national parks or docking fees at federal ports.

While the results of Mr. Clement's efforts won't be known until the release of the 2012 budget, ministers and departments are starting to provide the first details as to what was cut as a result of previous "strategic reviews."

The issue of public-service spending cuts was a major concern during Question Period as opposition MPs expressed frustration at the lack of information so far from the government as to what is being cut.

NDP Leader Jack Layton urged the Prime Minister not to cut services that are key to Canadian families.

"Of course we will not cut such services, but at the same time what we will not do to Canadian families is raise taxes," Mr. Harper said in the House of Commons.

NDP Treasury Board critic Alexandre Boulerice said user fees discriminate against the poor because unlike income taxes, they are not geared to income.

"It creates a two-tier system: Those who can afford a public service and those who can't," he said. "New user fees, for real people in real life, mean new taxes. … They will say 'Oh, it's not a tax. It's only a fee,' but a tax is a tax is a tax."

A key part of Mr. Clement's speech appears to have been an attempt to butter up the public service in the face of hard times. The new Treasury Board minister praised the work of the public service in delivering stimulus spending during the recession.

"Moving forward, your skill and expertise will be absolutely essential in streamlining government operations and programs to ensure value for taxpayer money," he said.

Jobs eliminated

Some of the cuts so far:

Fisheries and Oceans

Fisheries Minister Keith Ashfield confirmed Wednesday that calls for search and rescue in Newfoundland will no longer go to St. John's, but rather to a centralized call centre in Halifax. He also said that some jobs vacated in his department will not be filled. His office said job reductions will amount to less than 1 per cent a year over three years, which works out to up to 275 fewer jobs at Fisheries. The department also plans to move away from annual quotas for some fish stocks in favour of setting rules every other year, or perhaps longer.

Bank of Canada

Last week, 33 information technology positions were eliminated at the Bank of Canada. Of those, 66 per cent were via layoffs and the rest were through attrition. The bank plans further job reductions next year, with a total reduction of 80 to 95 positions by April 1, 2012.

Environment Canada

About 50 term employees were recently told their jobs will be eliminated by the end of the month. The positions include scientists and scientific support staff.

National Gallery

Five curators at the gallery in Ottawa were recently told their positions would be terminated as a result of an internal spending review.