OTTAWA — The federal government is hoping to kick-start its cost-cutting campaign by offering cash to bureaucrats who find ways to save money.

Treasury Board President Stockwell Day has been asked to find $1.7 billion in savings this year to trim a record deficit that's forecast to be over $50 billion.

Day said public servants who come up with practical ideas that lead to measurable savings will be rewarded with incentives worth 10 per cent of the savings in the first full year of implementation.

"It's acknowledging that the people on the front lines are working hard every day on the job -- they are the ones who may have the ideas that everybody else is missing," he said.

The rewards will be capped at $10,000 apiece.

The two-year pilot program is set to start this fall in eight government departments, although not in big-spending bureaucracies such as Defence, Public Works and Industry. Those are part of a separate project review that may result in program cuts.

Day said the incentive program has nothing to do with cutting services.

"It's not a matter of cancelling a service and then asking for the cash," he said. "Service still has to be delivered, the goals of the service have to be maintained and the dollar saved."

Day called the program a win-win for government workers and for taxpayers. He said similar programs in the United States and Canada have been highly successful, including one he implemented in Alberta when he was in government there.

The head of Canada's public service said he wasn't aware of any similar programs.

"I'm sure there are areas in any operation where efficiencies could be found and possibly cash savings," said John Gordon, president of the Public Service Alliance of Canada.

"But this seems to me like a wrong-headed approach. You're dangling a bag of money in front of people and saying, 'OK folks, come up with the ideas and this is yours.' Yes you're going to cut corners, but they're not going to be thinking of the long term effects on programs."

New Democrat MP Paul Dewar said he applauded the idea of engaging the public service, but questioned the need for bonuses.

"These innovations shouldn't require prize money," he said. "It should be what governments do and should be co-ordinated from the top."