Centralized borrowing

CBCUnlocked points out that according to a KPMG report, the federal government is effectively throwing money away by borrowing through Crown corporations and government agencies rather than through a centralized service:

The federal government could save as much as $620 million over five years by taking over borrowing now done by six large Crown corporations and government agencies, a new report says.

The government already guarantees the loans made to the six, but they make their own financial arrangements...

The study concluded the six agencies pay higher interest rates than the government does, and a single borrowing agency could cut those.

Including Canada Housing Trust, KPMG estimated the borrowers’ direct costs could be cut by $33 million in the first year, rising to $330 to $620 million over five years. Without CHT, the savings are much smaller, $10 million in the first year and $33 to $175 million over five years.

The article points out that the proposed change will probably be questioned based on both the organizational independence of the agencies involved, and "governance practices". But those should be simple enough issues to deal with for a government looking to make effective decisions, rather than merely easy ones.

Indeed, the Liberal response could be a reliable litmus test of Martin's political will. Are the Liberals willing to knowingly allow government agencies to pay higher interest rates than necessary solely for the political benefit of seeming to run a decentralized government, or for the convenience of avoiding a temporary turf war? If the answer is "yes" to either, then that should put another serious dent in PMPM's image as a good manager.