The Liberal platform promised $13 billion in “savings” by the 2028-29 fiscal year. This was a very round number, which always makes me nervous that this wasn’t a bottom-up exercise when specific budget lines are targeted. Rather, this was almost certainly a top-down exercise when you take a very high-level budget item and cut it by a round amount. In this case, it seems that they took the overall operating expenditures, which stand at $130 billion, and selected 10 per cent of it.
The Liberal platform suggested several ways to achieve these savings and, specifically, that they would come from direct program expenses. The platform said this might include:
They don’t seem interested in cutting transfers to people or other levels of government. They also don’t seem interested in cutting grants, say to non-profits, to provide services on their behalf. So, what is there to cut? Well, I kicked the tires a bit on this one.
The problem is that it’s impossible to find that many “savings” on the operating side of the budget without drastic cuts to public services. Cutting contracting out, for instance, would likely only result in $1.2 billion in savings — and you’d want to bring at least some of that expertise back into the house anyway.
It’s impossible for the Liberal government to find many “savings” on the operating side of the budget without drastic cuts to public services, writes David Macdonald
A lot of government outsourcing is likely off the table. It will probably expand in the coming years. Things like construction and engineering contracting are going to go up. Health contracting for military and RCMP personnel won’t be cut either.
If you look at federal spending projections, there’s not much fat to trim. The federal operating expense line is already projected to be dead flat for the next five years. There is no spending growth to cap. It's already capped.
Defence is the elephant in the room
The Department of National Defence (DND) is the elephant in the room. To try to appease US President Donald Trump, the federal government is going big on defence spending: $8.57 billion. That’s a massive budget line item when you’re hunting for savings. Especially since DND takes up 28 per cent of federal operating expenditures.
If the cuts are proportional by department, we would expect to cut $3.5 billion in defence spending. But that department will likely be safe from cuts as Canada increases its NATO contributions and, astonishingly, agrees to be a part of Trump’s proposed “Golden Dome” layered defence shield.
Remove DND from spending cuts and what’s left amounts to $89 billion in operating expenditures. To cut $13 billion out of that, the government would be looking at a 15 per cent cut in remaining departments, not the original 10 per cent.
