Finance Minister François-Philippe Champagne says Canadians should brace for difficult decisions in the next federal budget as Ottawa moves to cut billions in program spending. Speaking ahead of a cabinet retreat in north Toronto on Thursday, Champagne acknowledged that the reductions would likely include staffing adjustments in the federal public service.
Earlier this summer, he directed ministers to draft plans to reduce departmental spending by 7.5 per cent in 2026, 10 per cent the following year, and 15 per cent by 2028–29. “Will there be tough choices to make? Definitely,” Champagne said. “We said we’re going to spend less so we can invest more. And people understand that.”
The cabinet retreat, focused on the economy, relations with the United States, and major infrastructure priorities, comes as Prime Minister Mark Carney signals a fall budget that will be both “austerity and investment-focused.” He has promised that transfers for health care, education, and individuals will be shielded from cuts, while criticizing what he called the excessive pace of spending under past governments.
Champagne did not outline which programs might be scaled back but suggested Ottawa is looking at using technology and service streamlining to deliver “value for money.” He acknowledged the public service has grown significantly in recent years and said adjustments are overdue. Analysts say the upcoming spending review could prove one of the most consequential fiscal exercises in more than a decade.
The retreat has also attracted attention for its guest list. A planned appearance by Kevin Roberts, president of the U.S.-based Heritage Foundation and a close ally of Donald Trump, was canceled after Roberts withdrew. The think tank is behind the controversial “Project 2025” proposal to restructure U.S. government institutions. Champagne defended the initial invitation, saying it is important to understand “different perspectives” from Washington. Cabinet ministers will also hear from Kevin Rudd, Australia’s ambassador to the United States and a former prime minister.