Canada to speed up pace of some spending cuts: report

Mon Jan 9, 2012 5:56pm EST
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OTTAWA (Reuters) - The government plans to double the pace of spending cuts in some major ministries as part of its plans to eliminate the federal deficit, the Canadian Broadcasting Corp said on Monday.

Ottawa has already told government departments and agencies to come up with two scenarios, one that cuts costs by 5 percent and another by 10 percent over four years. Officials said late last year the 10 percent scenario was the most likely.

The CBC said the Defense, Foreign Affairs and Public Works departments, as well as the Canadian Security Intelligence Service spy agency, would have to cut spending by 10 percent over two years rather than four.

The ruling Conservatives' original deficit-reduction plan contemplated cutting C$11 billion ($10.8 billion) in government spending over four years. Lawmakers now say privately they are looking for savings of around C$24 billion in the same period.

A spokeswoman for Treasury Board Minister Tony Clement, who is overseeing the spending cuts exercise, said no decisions had been made. The government says it will make its plans known in the next budget, expected in the first quarter of 2012.

Last year, Ottawa announced it would push back the target for balancing the budget by one year to 2015-16 and blamed economic problems in Europe and the United States.

Political opponents say the right-leaning Conservatives want to cut the size of government for ideological reasons and are using the deficit as cover.

($1=$1.02 Canadian)

(Reporting by David Ljunggren; editing by Rob Wilson)