By Promit Mukherjee
(Reuters) -Canada’s finance minister has asked all ministries to find savings, assess spending on programs, cut down on work duplication and look to reallocate funds from other programs to priority projects, a government official said on Monday.
Citing two letters sent by Finance Minister Francois-Philippe Champagne, along with the President of the Treasury Board Shafqat Ali, the official said the letters are primarily seeking ministries to become financially disciplined.
Prime Minister Mark Carney has promised billions of dollars of new spending from defense to housing to massive nation-building projects. But he had also set a new fiscal goal of balancing the operating budget by 2028-29.
While the details of how that will be achieved are still not clear, economists have said that in the absence of any major savings or a big bump in growth, the government’s increasing spending pressures will keep deficits perennially high.
The official said Carney’s plan had been to spend less and invest more. With investment boosted through various bills and measures, the focus is now on spending less, the official said.
The official was not authorized to speak on record. The finance ministry did not immediately respond to a request for comment.
The Globe and Mail was the first to report the news.
The finance ministry has asked all ministries to find savings not just for one year but in the long term, the official added.
All the ministries have been asked to find 7.5% from program spending for the 2026-27 fiscal year, followed by 10% in the next year and 15% in the year after.
The government has asked the ministries to review their current budget, assess their ongoing programs, check whether a spending measure is meeting the objective of the program, see if some programs are being duplicated at the provincial or the municipal level and report back to the ministry.
The ministries have also been asked to identify three priorities inside their ministries and reallocate funds from another program for those, the official added.
The Finance Ministry is preparing for its budget document for the current fiscal year, which is likely to be presented in Parliament in early October.
(Reporting by Promit Mukherjee in Ottawa and Abu Sultan in Bengaluru; Editing by Chris Reese and Stephen Coates)
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