Spend less, get less: The reward for cost-cutting could be a budget cut

Newfoundland and Labrador's finance minister says reducing operating grants to agencies, boards and corporations is "certainly an option" as the province moves to introduce legislation requiring efficiency.

Tom Osborne said Tuesday that the organizations which account for 60 per cent of public spending have to do their part to address the province's "unstable" financial situation. 

Government is borrowing $2.3 million every day to finance the deficit, now pegged at $852 million, which is higher than the $778 million originally forecasted. 

That is "unsustainable," Osborne said.

• Cut spending, N.L. government tells agencies, boards, corporations

Osborne criticized the boards and agencies which manage health care and education, energy projects and a lot more, for a spending increase of $18 million at a time when core government departments have cut spending by $22 million.

"This is not about looking for layoffs or drastic cuts in services," Osborne told CBC Radio's On the Go. "It's about finding efficiencies."

Attrition the mantra

Memorial University said Tuesday that it is compelled to balance its budget, spending within the limits set by its annual operating grant from government — $315 million in 2017, down slightly from the year before.

Maybe government doesn't have to provide as large an operating grant. That's where we're going with this.- Tom Osborne

But Osborne said the university and other agencies can do more, through zero-based budgeting and attrition — that is, not filling jobs as they become vacant.

"We've got a situation here where taxpayers are digging deep into their pockets and the only way we can relieve the taxpayers and ease up on taxes is to find efficiencies. I don't see anything wrong with finding efficiencies at Memorial University."

The reward for finding ways to save money?

"If we're able to find efficiencies at Memorial University, maybe government doesn't have to provide as large an operating grant. That's where we're going with this," Osborne said.

It's not just MUN, he emphasized, but also the College of the North Atlantic and other agencies as well.

Borrowing to cover Muskrat Falls costs is a particular thorn in government's side.

"Nalcor still remains a risk for government, and for ratepayers," Osborne said. "We'd like to lower the anticipated increase in electricity rates. The only way to do that is through efficiencies."

Osborne said he hopes to introduce legislation in the fall sitting of the House of Assembly.