Question Period Note: REFOCUSING GOVERNMENT SPENDING

• Budget 2023 outlined measures to bring the pace and scale of growth in government spending back to pre-pandemic levels, to ensure that public funds are being invested in the priorities that matter most.

• Potential savings will target discretionary spending related to travel, professional services and departmental operations.

• This initiative is government wide and adjustments will be phased in over a four year period between now and 2026/27.

• It is important to note that there will be no changes to the funding that is allocated to benefits and services for Veterans and their families.

BACKGROUND – REFOCUSING GOVERNMENT SPENDING

Context
• Department’s submitted savings proposed to TBS on October 2.

• Final decisions were communicated to VAC on February 4, 2024.

• Recognizing all proposals are considered Cabinet Confidence, details will not be shared publicly with any updates integrated into the Departmental Plan 2024.

Summary of Approved Savings
2023/24 2024/25 2025/26 2026/27 and ongoing
Travel & Professional Services $3,718,000 $5,322,000 $5,826,000
Operations $2,669,000 $3,527,000 $5,674,000
Departmental Reserve $2,357,000

Total Savings

$2,357,000
$6,387,000
$8,848,500
$11,500,000

WHEN PRESSED:
Q1 – What is the savings amount for VAC and what is the timeframe for implementation?
Budget reductions and related savings will be phased in over a four-year period, beginning in 2023/24. This will result in a total of $11.5M in budget reductions and related savings from 2026/27 onwards.

Q2 – How did VAC determine where it could find these savings?
Budget 2023 proposed departments reduce spending on consulting, other professional services travel, operations and transfer payments which will result in ongoing savings. With these principles in mind, savings will be achieved through reduced spending on activities that no longer align with the Department’s core business, and through attrition.

Q3 – Why are savings being sought at this time?
All Departments are being asked to find savings. In Budget 2022, the Government announced its plans to reduce spending of over $3B for COVID-19 supports. Budget 2023 continued these efforts to bring the pace and scale of the growth of government spending back to a pre-pandemic levels, to ensure that Canadians’ tax dollars are being used efficiently and being refocused to deliver critical services to Canadians.

Q4 – What impact will planned savings have on the services and programs delivered to Veterans?
The focus of this review was to identify savings associated with discretionary spending on consulting, other professional services, travel, and operations. VAC’s programs to Veterans were excluded from this savings exercise. Additionally, every effort has been made to minimize the impact on Departmental operations and services to Veterans, with the focus being reduced spending on activities that no longer align with the Department’s core business.

Q5 – How many jobs are expected to be cut as a result of this savings exercise?
Initital reductions related to professional services and travel will have no impact on jobs. It is also possible that professional services reductions could result in hiring additional employees if savings can be acheived. Those related to operating expenditures will be phased in over four years, so are not expected to result in job loss outside of attrition and having resources focused on higher priority activities.

Q6 – What will happen to the staff who were hired to deal with the backlog of applications?
Addressing the backlog and maintaining the service standard for disability applications continues to be a top priority for the Department. VAC remains committed to working with Central Agencies and the RCMP to establish a long-term strategy and capacity to meet the demand for disability benefit applications.

Q7 – How does this impact VAC’s commitment to bringing the Veteran to Case Manager ratio to 25:1?
It will be some time before we will know how this initiative will impact our work. However, we are not expecting it to impact priority services to our clients. Our goal is to use technology and address duplication to find efficiencies in how we work and redeploy resources to higher priority areas, such as case management.