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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.
Treasury Board President Shafqat Ali went further on social media. “The method used to generate the story over-simplified how Parliament accounts for money and compared apples to oranges,” he wrote. “This misrepresented key numbers and facts.”
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And yet, the Treasury Department has for years published a table in its Main Estimates titled “Estimates by Organization.” It clearly invites Canadians to make comparisons across columns in which the government presents the name of each organization along with “2025-2026 Estimates To Date” and “2026-2027 Main Estimates” or planned spending for the next year. The Global News analysis drew on data in that table combined with further detail in the departmental plans.
Nonetheless, Champagne argued, the numbers do not tell the whole story.
“It would be worthwhile… that we spend time together to review that and certainly provide a more comprehensive picture so that Canadians can form their own view about the exercise,” he said.
Canada Post, for example, is supposed to be a self-financing Crown corporation but ran into serious financial difficulty in 2025. As a result, it received more than $2 billion from the federal treasury to help pay its bills. That was an extraordinary one-time payment and one the government does not anticipate having to make in 2026-2027.
As a result, in the “Estimates By Organization” table published by Treasury Board, the approved spending by the government on Canada Post is listed for 2025-2026 at $2.064 billion while projected spending by the government on Canada Post next year is listed at $22.2 million — a reduction of 98.9 per cent — and a reflection of the fact that the government hopes Canada Post does not need the cash infusion next year that it did in the current year. Canada Post will continue to be responsible for generating its own revenue.
The Canada Revenue Agency shows that approved spending for the current year was $10.6 billion while Parliamentarians will be asked to authorize the agency to spend up $6.3 billion next year, a drop of more than $4.3 billion, or more than 40 per cent.
A government official argued that without further context, a reader would assume that the reduction in overall spending implied significant job cuts at the agency. In fact, the the reduction in the CRA’s requested spending authority is a result of the fact that the CRA was the government department that paid out the consumer carbon tax rebate and, in 2025-2026, needed Parliamentary authority to “spend” money on those rebates. As the consumer carbon tax has since been cancelled, the CRA does not need to seek parliamentary approval for that extra spending.
There will, though, be some modest job cuts at the CRA as a result. The CRA’s departmental plan says that its current employee headcount is 51,427 and it expects to reduce that by about 2,000 or 3.7 per cent over the next year as a result of the elimination of the federal fuel charge, the end of the temporary two-month GST break and the end of the luxury tax.
Again referring to the “Estimates by Organization” table, the Department of Fisheries and Oceans plans on spending $4.3 billion less, or 69 per cent less, than in 2025-2026. But that’s largely due to moving the costs and responsibility for operating the Canadian Coast Guard out of Fisheries and over to the Department of National Defence. National Defence’s planned spending for next year is set to grow by nearly 12 per cent, or $5.3 billion, compared to this year.
Ali, the Treasury Board president, noted in his social media post that the spending plan MPs will begin to debate next week does indeed reflect a government-wide effort to constrain spending, known inside the government as the “Comprehensive Expenditure Review.”
“Most departments were asked to find up to 15 per cent savings over three years, “ Ali wrote “Entities such as Crown-Indigenous Relations and Northern Affairs, Indigenous Services, National Defence, Women and Gender Equality, and the Federal Research Granting Councils were asked to find 2 per cent savings, recognizing both the essential nature of their mandates and the need to maintain continuity in the delivery of critical services.”
As a result, the spending reductions have fallen unevenly across government. The Canadian Space Agency, for example, received parliamentary approval to spend $1.4 billion in the current year but is asking for $400 million less, or 33 per cent less, next year.
Global Affairs Canada, in its departmental plan, notes that its spending profile will decline from a peak of $8.5 billion in 2023-2024 to $6.6 billion by 2028-2029. The drop comes from $1.1 billion in savings through the Comprehensive Expenditure Review and from $812 million in savings as Canada ends support of its International Climate Finance Commitment.
“Canadian families are tightening their belt,” Champagne said. “I think it’s about time that the federal government does the same.”
David Akin is the chief political correspondent for Global News.
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