Canada Finance Minister Directs Cabinet to Cut Program Spending by Up to 15%

Canada's Finance Minister François-Philippe Champagne has instructed Liberal cabinet ministers to identify substantial spending cuts ahead of the 2025 budget, aiming to reduce program expenditures by 7.5% in 2026, increasing to 10% in 2027 and 15% in 2028-29. This directive is part of a broader effort under Prime Minister Mark Carney's government to curb a decade of federal public sector expansion and reallocate funds towards tax cuts, infrastructure, housing, and a significant boost in defense spending. Ministers are required to review their portfolios for programs that meet objectives and avoid duplication, and to propose priority initiatives funded through reallocations by the end of summer. The Public Service Alliance of Canada has expressed support for economic strengthening but opposed cuts that could impact public services and workers. Carney has committed to capping public sector spending growth to 2% annually, contrasting the prior 9% annual increases under Justin Trudeau. These measures respond also to increased defense spending demands following concerns from the Trump administration and NATO allies.