Budgets Simulated and Real

The centrepiece of my undergraduate public management course is a budgeting simulation in which a group of ministers and public servants either divide up a fiscal windfall or allocate a collective budget cut. This year, we allocated a $6 billion dollar fund for new initiatives for the Government of Canada. We took the government’s priorities to be expanding trade with the US and the rest of the world, safety and security, immigration and refugee resettlement, mitigating climate change, and celebrating Canada’s 150th birthday.

I divided the 39 students in the class – the largest in recent years – into 17 two-person program department teams, a three-person Department of Finance analytical team, and the two ultimate decision-makers, the President and Secretary of the Treasury Board. The only major department not represented was Fisheries and Oceans, which is not very high profile in Toronto. We also had teams for Parks Canada and the Canada Border Services Agency, but not the Correctional Service of Canada.

The program department or agency teams were required to submit 5 page written proposals (with technical appendices) for new programs to be supported by the new initiatives fund. The Finance Department reviewed the submissions, sent written questions to the program departments, and made recommendations for dividing up the $6 billion fund. The Treasury Board team led a meeting (held in place of my normal class) of all departments and agencies to discuss their proposals and several days later announced the final allocations.

I’ll discuss some of the things that were done well. Every program department submitted its proposal by the deadline. The best program department teams carefully read the government’s Report on Plans and Priorities for their department, and then developed something new that wasn’t already in the plan for the 2017-18 fiscal year. Smart program department teams came up with two or three new initiatives, rather than tying their fate to only one. They worked up detailed and credible cost estimates. They also had a sense of appropriate scale, asking neither for too much – say, half the new initiatives fund – nor too little – less than $10 million.

The Finance Department team did excellent analytical work, for example questioning assumptions about the extent to which programs would be taken up by the population. The Finance Department team asked me – on my role as behind the scenes adviser – if it was appropriate to recommend that a department get nothing. I said that was okay. Finance subsequently recommended zero funding for some departments whose proposals were entirely Toronto-centric and for another proposal that was very large but not well-costed or well-specified.

The Treasury Board team ran the meeting by questioning the program departments, one-by-one, about their proposals. The Finance Department team also got into the act. Both central agency teams showed that they had thought about and were conversant with both the thrust and the details of the program departments’ proposals. In its decisions, the Treasury Board team made its own judgements, maintained some recommendations of zero funding, and in instances of what they thought were essential priorities, allocated more than the Finance Department team recommended, or the department itself even asked.

One thing I wished this Treasury Board team would have done was to initiate an open discussion among ministers about the three or four most expensive proposals. This would have forced all departmental ministers and deputy ministers to, in the terminology of my late co-author Allan Blakeney, act as judges of all proposals rather than solely as advocates of their own.

In the debrief of the simulation, I took the opportunity to discuss the Trump Administration’s budget proposals. In addition to large spending increases for homeland security and border protection, it is asking for $54 billion more for Defense. Its fiscal framework of revenue neutrality – not increasing the deficit – will require the $54 billion to be funded by cuts from less favored agencies. Trump is proposing deep cuts to environmental protection, culture, foreign aid and diplomacy, public health, and the social safety net. I brought the discussion home for the students by restating Trump’s increase in defense spending  on a Canadian scale – approximately $6 billion – and enumerating the Canadian government departments with mandates in the areas of Trump’s proposed cuts: Environment and Climate Change; Immigration, Refugees, and Citizenship; Canadian Heritage; and Global Affairs Canada.

Personally, I think the Trump budget proposals are awful, representing an attempt to spread fear to create a garrison state and diminish many of the valuable things government does. The US has 10 aircraft carriers by its own definition and 19 by the definition other countries use. How many more does it need? Trump’s vision is to make the US more like Sparta, and less like Athens. We all are, or should be, Athenians now.



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