Proposed federal cuts to public services appear to be expanding by the day.
The details have yet to be revealed, but these cuts will easily be the biggest items in the fall budget. Any resultant “savings†will go toward more defence spending, as well as tax cuts for the middle and upper classes.
It’s a brutal trade-off.
In the election campaign, the Liberals proposed . That alone would’ve affected services. But since then, Prime Minister Mark Carney has said the military, the RCMP, border services and major transfers (such as equalization payments) will be protected.
Consequently, all the other departments are tasked with making up the difference. On July 7, the feds doubled what was in the cuts envelope, including departmental transfers along with the previously announced personnel and professional-services budgets.
Who’s on the other end of those departmental transfer cuts? Mostly First Nations governments, which provide health, education and police services. The provincial versions of these health and social transfers were protected, but the .
One out of every five dollars cut will likely come out of Indigenous programs administered by another level of government. Disability, income and health benefits for veterans could suffer cuts of $900 million a year.
Half of the “savings†to pay for the military will consist of cuts elsewhere. This isn’t so much “efficiency†as it is making it someone else’s problem.
As the Star has reported, certain Crown corporations will also face 15 per cent cuts, including the CBC, Via Rail, the Canada Mortgage and Housing Corporation and national museums and galleries. All told, they’ll be asked to remove $2.1 billion from their spending by 2028-29.
The CMHC has the largest transfer, so it will be asked to plan for the largest cut, worth $955 million annually at peak. The corporation insures residential mortgages, and that will remain unchanged — because that’s funded by premiums.
But the CMHC also administers affordable-housing programs for the feds, worth $6.4 billion in 2025-26. It’s these programs that will likely suffer almost $1 billion in cuts. Half of the money goes to “assistance for housing needs,†which largely means affordable housing for First Nations, Métis and Inuit communities.
Notice a concerning Indigenous theme to these cuts?
The CBC will have to present plans for a $214 million cut annually. Pre-election, the Liberals extolled the virtues of our public broadcaster and promised to boost its funding by $150 million a year. Post-election, they’re looking to cut that much and then some. It’s quite the flip-flop.
Via is also on the chopping block, with proposed cuts amounting to $90 million annually by 2028-29. The 2024 federal budget, under Justin Trudeau, committed $85 million that year to increase train frequency, upgrade the fleet and improve the network. So just like the CBC, Via got a shot in the arm one year only to have it all cut back the next.
This summer, the federal government introduced the “Canada Strong Pass†for free or reduced admission to parks, national museums and galleries, so that Canadians could “†to be here.
These are great initiatives, and they should be made permanent. Instead, national museums and galleries are facing $43 million annually in cuts. So much for what makes us extraordinary.
The playbook for these “efficiency†cuts is clear: make them big, do them fast and never get into the details — because the details are a disaster. Pre-election, the Liberals promised more affordable housing, more Via, more CBC and more Canadian culture. Post-election, the narrative has changed.
Now they’re talking about cuts so deep, they’ll outdo the Harper government and rival Paul Martin. Back in 1995, then-finance minister Martin claimed cuts were necessary, otherwise Canada would hit a “debt wall.†Today, it’s a grand trade: massive military expansion in return for massive service cuts.
And somehow this didn’t make it into the election debates.
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