Prime Minister Mark Carney has announced plans to scale back federal spending later this year, though he has yet to clarify which programs will be affected or the extent of the reductions.
He made the announcement during a Liberal caucus gathering in Edmonton, framing it as the beginning of a new chapter in fiscal responsibility. While Carney has floated a target of $25 billion in cuts over the next three years, this figure falls short of the more ambitious promises he made during the election campaign, including shrinking the public sector and boosting economic efficiency.
According to projections from the Department of Finance, federal expenditures in 2025 are expected to reach $558.3 billion. Much of that spending is already committed: $85.5 billion for seniors’ benefits, $71.1 billion for government payroll, $54.7 billion for health transfers, $54.2 billion in interest payments, and $29.6 billion for the Canada Child Benefit.
Opposition Leader Pierre Poilievre has criticized Carney’s approach, accusing the government of excessive spending and failing to deliver meaningful budget cuts.
Adding to the uncertainty, the government has not yet released a comprehensive budget for 2025. The most recent fiscal update—the Fall Economic Statement from December 16—projects a deficit of $42.2 billion.
