Civil servants will have to temper their wage demands, provinces will see smaller increases in the money they get from Ottawa, and short-term deficits are likely because of the global financial crisis and the slowdown in the economy, Finance Minister Jim Flaherty said Wednesday.Equalization is also on the table:
The finance minister said the government is doing everything to cut its costs as it prepares for a squeeze on revenues from corporate and personal taxes as the economy slows to a crawl.
A review of program spending now in its second year will be extended to Crown corporations to ensure they provide value for money, Flaherty said.
He also warned public-sector workers they cannot expect big wage hikes in the next round of bargaining for contracts.
"Growth must be closer to the growth of the economy to be sustainable," he said.Well if that doesn't motivate the provinces before that meeting they're supposed to have with DJ next week, nothing will.
"Without change, equalization is not sustainable and threatens the integrity of the program."
In the past few days we've seen news of pensions seeking federal funding relief and auto parts makers seeking federal help. Wonder what other time bombs are out there that these prudent fiscal managers have left us little to no contingency room to deal with?