ANALYSIS: Carney promised spending cuts — but not all cuts are equal

Finance Minister François-Philippe Champagne says the government has found ways to cut spending by $60 billion but cautions that published spending cuts require important context.

MPs will return to the House of Commons Monday after a March break week back in their ridings and, once back in Ottawa, will take up consideration of the Carney government’s 2026-2027 spending plan, new details of which were tabled in the House of Commons on the Friday before that break.

Those details, outlined over hundreds of pages in more than 80 departmental plans, confirm a shift in the Carney government’s budget priorities, with an emphasis on heightened defence spending and capital investment at the expense of some spending on, for example, science and foreign aid.

“We say we’re going to spend less so we can invest more,” Finance Minister François-Philippe Champagne said Friday in Montreal. “We found $60 billion of savings across different departments of the Government of Canada.”

But not all savings or spending reductions are equal, Champagne said, taking issue with a Global News analysis of the government’s spending plan. The Global analysis calculated that planned spending across 85 departments would be about $31 billion less next year than last year. Meanwhile planned spending across 40 departments will increase by $23 billion in 2026-27.

“Without going too technical… you need to separate what is … the sunsetters, some programs that we have to review on a yearly basis, some other programs that we have decided to rationalize, to use technology to merge, to look at back office,” said Champagne. “Some others where we said… we need to bring back the civil service to a more sustainable level, going back to levels that were there before the COVID.”

Champagne’s own department, the Department of Finance, presented a 2026-2027 spending plan that provides for the single biggest year-over-year increase in budgetary spending among all federal government departments and agencies. In its departmental plan, finance officials explained that the increase in its spending authority was required due to higher interest payments on Canada’s debt as well as increases in transfer payments to the provinces and territories.

“I can assure you, the finance department is not a winner in this exercise,” Champagne said.  “The finance department is the one who does the transfer.”

Champagne, as well as officials from several other departments, also said some of the spending adjustments described in both the departmental plans and the broader spending plan, known as the Main Estimates,  require important context beyond simply calculating the difference between the most recent approved spending levels and projected spending levels for the next year.