Carney and Poilievre both want to stop wasteful spending. But what would they cut?

It is an exciting debate for accountants.

Mark Carney, the presumptive favourite in the Liberal leadership race, says a government led by him would introduce a new budget "framework" that would "separate" the federal government's operating and capital budgets — drawing a distinction between spending that covers ongoing expenses for programs and services and spending that goes toward building and buying things like infrastructure, housing and military equipment. According to Carney, his government would aim to balance the operating budget within three years, while running a "small deficit" on capital spending.

Carney has likened this approach to the way homeowners pay their monthly bills while also investing to improve the value of their house. But expert opinion on Carney's proposed framework is at least somewhat divided — Kevin Page, the former parliamentary budget officer, told the Globe and Mail that it could allow for easier scrutiny of government spending, while Trevor Tombe, an economist at the University of Calgary, has come to the opposite conclusion. 

Conservative Leader Pierre Poilievre is decidedly in the latter camp. He says Carney intends to "hide" a deficit and "cook the books."

Poilievre's latest rhyme is undercut somewhat by Carney's assurance that his government would also "reinforce the capacity and oversight function of the parliamentary budget officer" to scrutinize this new treatment of capital spending. But regardless, the next election isn't really going to be a fight over accounting practices ("accrual" is a hard word to chant at partisan rallies).

The real budget debate, if there is to be one, is about what Carney and Poilievre would spend money on — and what they wouldn't.

While the rate of inflation has fallen over the last two years, Poilievre is still driven by the (debatable) premise that federal spending is driving inflation and should therefore be severely curtailed. In Poilievre's view, the federal budget is "broken." (Before she resigned as finance minister, Chrystia Freeland was often at pains to insist that Canada had the strongest balance sheet in the G7.)

Carney has not embraced Poilievre's broader premise. But Carney, a former senior official in the Finance Department, says the federal government has still been "spending" too much and "investing" too little. And both Poilievre and Carney believe that there is "waste" within government to be cut.

"A Mark Carney-led government's fiscal policy will focus first on reining in wasteful and ineffective government spending," the Carney campaign says. 

"We will cut bureaucracy, consultants, corporate welfare, foreign aid and other wasted money," Poilievre said last week.

If there happens to be a secret file marked "waste" hiding somewhere in the Privy Council Office, the next prime minister will have a fairly easy time figuring out what to cast aside. Failing that, the task of further reining in federal spending might be easier said than done.

Carney says he would cap the size of the public service and aim to make the operations of government more efficient by "leveraging AI and machine learning." But Poilievre is correct when he says Carney has not identified any specific federal programs he would target.

Poilievre has identified a handful. He says he would cut the housing infrastructure fund and the housing accelerator fund (though it's unclear how much money will actually be left in the latter by the time a new government is in place). He would defund the CBC, shutter the Canadian Infrastructure Bank and "dramatically" reduce foreign aid. 

A Conservative government would also reduce the size of the public service and its use of outside contractors (though those two goals might come into conflict with each other).