OTTAWA -- Federal departments should tighten their belts, and fast -- cabinet ministers will be looking for at least $1 billion in savings in just the next few weeks, the new Treasury Board minister says. Last year's effort to reallocate that amount in federal spending failed in part because cuts came too late in the budget year, Reg Alcock said yesterday.

So this time, he intends to trim $1 billion and use that for new priorities in the next federal budget, which will likely come in less than two months.

And $1 billion is just the start, said Alcock, a Winnipeg MP named to cabinet almost one month ago.

"I want to identify it now so the reduction of support in one area can be reapplied in another area" in the 2004 budget, he said.

"I'd like to do something that we can bring forward in all probability in the budget, so that we're not playing catch-up on this thing all year long."

In last February's federal budget, then-finance minister John Manley announced a similar reallocation exercise, but details were sketchy and it was never clear how well it worked.

That's because the process operated backwards, as the government tried to shift spending after the budget, said Alcock.

"It's kind of like . . . trying to change tires on a moving car."

The cabinet's expenditure review committee is now meeting to try to flesh out just how the $1-billion reallocation can be quickly made.

It is also plotting how it can overhaul the way government works over the long term.

The $1 billion is also just a starting point, added Alcock.

"That's a target we've been given and I'm comfortable with it . . . but over time, it could certainly (be larger)."

"If people get engaged in this and see advantages to it, you don't know where it could end up."

After Prime Minister Paul Martin's first cabinet was sworn in Dec. 12, Alcock and rookie Finance Minister Ralph Goodale announced a freeze on capital spending until the end of this fiscal year along with a sweeping review of spending programs.

All that came against a backdrop of a bleak fiscal picture that has left Martin with little money to work with as he prepares for a widely expected spring election.

Goodale will warn his caucus colleagues today that with money so tight, they should be careful what they expect from the new government.