The Federal Government has begun its comprehensive review of government spending, but what will it mean for the public service of Canada, what balance will have to attack and the liberals can really cut so much?
These are the questions facing Prime Minister Mark Carney while embarked on one of the most ambitious public expense reviews since former Prime Minister Jean Chrétien and his finance minister Paul Martin balanced the budget in the 1990s.
The Minister of Finance, François-Philippe Champagne, began the review of Carney on Monday by sending letters to other members of the cabinet, asking for “ambitious savings proposals” that will lead to spend less on the daily functioning of the government.
Champagne wants to reduce operating spending by 7.5 percent for fiscal year 2026-27, 10 percent of the following year and 15 percent in 2028-29.
Mel Cappe, who served as Secretary of the Private Council from 1999 to 2002, a position that includes heading the public service, said that the meeting of these objectives will be difficult but feasible.
“There is someone in the public who will be outraged by the cuts,” he said. “This will require that all ministers take hand, saying prayers together.”
Carney has said that there will be no cuts to transfers to the provinces for things as social and social programs, nor would reduce individual benefits, such as pensions and safety payments of old age.
They also save key programs that are implemented by the government of Prime Minister Justin Trudeau, such as child care, pharmacy care and dental care.
Sahir Khan, executive vice president of the Institute of Fiscal Studies and Democracy of the University of Ottawa, estimates that when those areas are carved, the government points to a pot of money that is $ 180 to $ 200 billion of the $ 570 billion that will spend this year.
The Cabinet of Prime Minister Mark Carney has had the task of finding ‘ambitious savings’, with the aim of a 7.5 percent cut in federal expenditure next year and more cuts in the following years. Power & Politics asks Sahir Khan, executive vice president of the Institute for Fiscal Studies and Democracy and former officer of parliamentary budget, where those cuts could come from.
Sharon Desouusa, National President of the Public Services Alliance of Canada (PSAC), the union that represents some 240,000 government workers, said that he is concerned about the loss of jobs.
In CBC’s Power and politics This week, he said that the cuts do not “have to be behind public sector workers … There are solutions that we can really propose.”
To calm those fears, the liberal government said it plans to fulfill its objectives by eliminating vacancies and reallocate the staff instead of dismissing workers.
But previous employees of the private council say it will be difficult for the Government to avoid reducing staff because salaries, benefits and pensions are a large part of the operational budget.
Supported by wear
In 2023-24, excluding unique payments such as the subsequent payment made after signing a new collective agreement, the federal government spent $ 65.3 billion about wages, pensions and benefits. That was a 10 percent increase with respect to the previous year.
“In 1995, the salary bill was so high that it was necessary to invest some money to facilitate people to give them money,” Cappe said.
“If you are going to do that on a large scale, you must be prepared to see those costs in advance. Because it will save a lot of money in the long term.”
Michael Wernick, the secretary of the private council from 2016 to 2019, told CBC News to depend on wear “makes no sense as a management strategy.”
“What happens if your key in key cybersecurity is removed next week? Are you not going to replace it?” said. “If your aspiration is a serious compression of the numbers, then it must be more conscious about it and must make dismissals and purchases.”
Where you cut, instead of how much
One of the ways in which the prime minister has said that his government will reduce operating expenses is to find ways to use artificial intelligence and automation.
Wernick says that the approach will require investment in training and technology and that, as purchases for public servants, it comes with an initial cost.
But both former employees say that the liberal government can achieve its objectives and have a suggestion about how it can be done.
“Stop doing some things, instead of a general cut,” Cappe said.
By following this route, the staff no longer carries out a certain function can be transferred to work in other government priorities. Wernick says that cutting entire business lines also prevents spending from retiring.
“If you do not completely kill the program, the pressure to restore it will almost immediately come from customers, from mayors, from Caucus,” Wernick said.
Donald Savoie, an expert in public administration and governance at the University of Moncton, said the government can be reduced without damaging the provision of services.
“Let’s look at the programs we no longer need, let’s see organizations we no longer need,” Savoie said.
He said there is also room to reduce the use of external consultants and contractors, but Wernick warned that doing so would reduce access to experience. That can be mitigated, he said, training public servants, but that comes with an initial cost.
Trying to emulate the fiscal success of Chrétien and Martin
Savoie said Carney has two things in common with Chrétien who is a good omen for her cost reduction ambitions.
The first is that, unlike Brian Mulroney, Stephen Harper and Trudeau, both Carney and Chrétien had experience working in the government long before ensuring the highest position in the country.
Savoie said that means Carney, like Chrétien before him, knows what levers to throw.
The other thing that both men share is a mandate to respond to a national crisis. In the 1990s, the Federal Debt of Canada was so large compared to the economy that a third of each dollar raised in tax was only to address their interest payments.
“I think what helped Chrétien immensely in 1994-95 is that the Canadians were seized with a real crisis,” Savoie said.
“Then the Canadians said: ‘We have a problem’ and so on [Chrétien] It could resort to public support. And along the same lines, Carney can resort to public support because Canadians see that dealing with Trump, dealing with tariffs, is very difficult and some difficult decisions must be made. “
For that reason, said Savoie, the Canadians will be much more open to suffering through the cuts of what were five or 10 years ago, which may be sufficient political license for the review of expenses to be fruitful.
