Why Controlling Government Waste Matters

“A billion dollars here, a billion dollars there, and soon you’re talking about real money.”

I admit to a feeling of satisfaction whenever I identify a government department that’s sinking $101 million, $400 million, or even $3 billion into ongoing programs that are demonstrably failing. Perhaps, should the right people hear the news, I will have made a difference.

But whether or not anyone ever picks up on my discoveries, wasting public resources at that scale is definitely a terrible thing, right? Right?

Well not if you were to follow the thinking of one of my sons (the second-to-youngest, for those of you keeping track at home). He’ll be quick to remind you that wasting even a billion dollars represents less than a quarter of one percent of the federal government’s annual expenditures. It’s hardly worth getting all worked up over such a trifle. And even if the billion you save was redirected into the gaping maw of, say, our desperate healthcare system, who’s to say it won’t be misspent there, too?

Well here’s a number that represents a powerful counterargument: 46,540,000,000. That’s how many dollars the government anticipates we’ll spend through the 2024-25 fiscal year to service federal public debt. That is to say, if there were no federal public debt, there would have been $46.54 billion more available to spend on programs…or to reduce Canadians’ income tax.

This chart shows how much it’s been costing us to service that debt over the past few years. A lot of the increase can be blamed on rising interest rates - which were, of course, at least partly the result of inflationary government spending. But none of it would have been this bad if there had been less debt to begin with.

Imagine freeing up that money for vital programs or tax relief. And all we need to do is identify and eliminate all of those $101 million, $400 million, and $3 billion wasted line items. The only real losers would be the individuals employed to administer those patently ineffective spending programs. Sad. But government doesn’t exist to provide insanely expensive and unproductive employment.

Most of the waste I’m observing is likely the result of inertia rather than malice: politicians present departmental mandates and the departmental drones faithfully execute until they’re told to stop. The problem is that there’s rarely an incentive to issue a stop order.

But if decision makers and managers don’t see the problem, increasingly, Canadians do. We grumble about it and, over time, just stop listening to government. That crisis of institutional trust we’re hearing about? It’s real. And one of its causes is the incompetence lying behind stupid spending choices.

So, in response to my son’s (honestly acquired) cynicism, identifying and eliminating waste can, of course, free up money for effective spending programs or tax cuts. But it can also strengthen the government’s basic credibility. And a few high-profile “accountability events” can also inspire an invisible ripple effect where other managers may quietly respond by self-auditing their own programs.

As I’ve already written, the office of the Auditor General seems heavily constrained in the targets they select. There’s much more work here that needs doing. I’m trying to identify what I can through The Audit, but none of that means much if no one inside is listening.