Finance Minister François-Philippe Champagne on Monday told every federal minister to “identify ambitious savings proposals” that will carve 7.5% out of program spending in the next fiscal year. The instruction launches what Ottawa is calling a comprehensive expenditure review aimed at curbing the cost of running government while freeing money for big-ticket economic projects.
Champagne’s letter directs departments to test whether each program is core to the federal mandate, meets its stated objectives and does not duplicate provincial or municipal work. The minister’s language echoes Prime Minister Mark Carney’s election pledge to “spend less so Canada can invest more,” a promise that underpins his first budget due this fall.
Transport and Internal Trade Minister Chrystia Freeland framed the exercise as a shift from bureaucracy to productivity.
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“This review fulfils our promise to spend less on the government itself, to invest more in Canada and Canadians,” she said, adding that childcare, dental care and other social transfers “will not be touched.”
Departments must trim program budgets by another 10% in 2027-28 and 15% in 2028-29. Each portfolio is also required to list its top three priorities for the upcoming budget and propose ways to finance them internally—a pay-as-you-go rule modelled on the approach championed by Opposition Leader Pierre Poilievre.
Carney’s cabinet set seven priorities for new spending requests: fortify the US economic and security relationship, build inter-provincial trade corridors, lower living costs, accelerate housing supply, modernise the Canadian Armed Forces, return immigration to “sustainable levels”, and hold down government operating expenses.
Under the previous Liberal government, Ottawa’s operating costs expanded roughly 9% a year—well ahead of revenue growth—and the federal workforce swelled from 257,034 employees in 2015 to 357,965 in 2025, a 40% jump that doubled the rate of population growth.
The discipline push coincides with a promised $9.3 billion boost to defence this year and a longer-term pledge to lift military outlays to 5% of GDP.
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