Finance Minister Jim Flaherty says budget cuts to be outlined on Thursday will be directed at the bureaucracy, not services to people.
The finance minister characterized his austerity program as modest compared to the Liberal deficit-slaying budget of the mid-1990s.
He said it will be directed at “the back-office,” suggesting the austerity package will be felt most acutely by the public service in terms of job reductions.
Conservative sources have told The Canadian Press the cuts would build to $7 billion in annual savings by 2014.
Flaherty says the cuts are appropriate for the times.
He points out that Ottawa hired more public servants during the recession, but now that the economy is recovering the objective should be to eliminate the deficit.
Economists say although the cuts won’t be enough to derail the recovery they — in tandem with slashing at the provincial level in Ontario — will be sufficient to slow growth for several years.