Trudeau government unveils plans to divert money from some departments for new priorities

Prime Minister Justin Trudeau’s government has unveiled how it plans to spend billions of dollars in the coming year and where it plans to reduce spending, including plans to divert $2.5 billion from a variety of departments toward government priorities.

“What we want to do is take the savings … across ministries and put them towards the priorities you are seeing in our main estimates,” Treasury Board President Anita Anand told reporters. “That is affordable housing, that is health care, that is supports for seniors.”

Overall, the government expects to spend $449.2 billion in the coming year, up from the $432.9 billion it planned to spend this year and down from the $492.6 billion that it ended up allocating.

That amount is likely to change over the course of the year once Finance Minister Chrystia Freeland unveils her budget this spring and the government tables supplementary estimates to address issues that arrive over the course of the year.

Among the spending envelopes the government highlighted is $5.6 billion for the Canada Mortgage and Housing Corporation and $8.4 billion for Health Canada — part of which will fund expansion of the Canadian Dental Care Plan.

Meanwhile, a number of departments and agencies risk big spending cuts in the coming year.

The Public Health Agency of Canada, whose budget swelled during the COVID-19 pandemic, will see its spending drop to $1.8 billion from $5 billion — a 63 per cent reduction. That’s still nearly three times more than the $641.8 million it was allocated in the 2020/21 main estimates before the pandemic.

The departments of Indigenous Services and Crown Indigenous Relations are set to receive more than 50 per cent less than they ended up being allocated over the past year. Those allocations were increased substantially over the course of the year after the government ended up spending millions of dollars on settlements, like the one centred on child welfare.

Two regional economic agencies in areas that risk being election battlegrounds are getting a lot less money. The budget for the Federal Economic Development Agency for Southern Ontario is down 50.4 per cent to $228 million, while the Economic Development Agency of Canada for the Regions of Quebec is down 46.1 per cent to $316 million.

Other regional economic development agencies are also getting less, such as the Pacific Economic Development Agency (a cut of 42.6 per cent), the Federal Economic Development Agency for Northern Ontario (down 28 per cent), the Atlantic Canada Opportunities Agency (down 25.6 per cent) and the Department of Western Economic Diversification (down 24 per cent).

While Canada has been facing more emergencies related to weather and wildfires, the estimates call for a drop in spending for the Public Safety and Emergency Preparedness department. The estimates call for its spending to drop 46 per cent, from the $2.6 billion it was allocated last year to $1.6 billion.

Immigration, Refugees and Citizenship Canada’s spending is also set to drop by 33.7 per cent to $4.1 billion, well short of the $4.5 billion it was allocated in last year’s main estimates and the $6.3 billion it ended up spending.

Health Canada was among the big winners in the main estimates; its spending is set to rise 18.7 per cent above what it spent last year, to $8.6 billion, more than twice what it was allocated this time last year.

With the prospect of an election sometime between now and 2025, Elections Canada is getting more money. Its budget is up 26.6 per cent, to $259 million.

The Canadian Broadcasting Corporation, which announced just before Christmas plans to cut hundreds of jobs across the country, is getting a 7.5 per cent increase to its budget, bringing it to just under $1.4 billion. Its operating expenditures are up 8 per cent while capital expenditures are up 1.7 per cent.

Speaking with reporters, Anand described CBC’s job cuts announcement as “premature” and said it was made before the estimates were finalized.

“We are upholding our support for CBC/Radio Canada and we encourage that organization to uphold its important mandate and to maintain as many employees as they can in all regions of our country.”

Anand also revealed the results of the exercise the government launched to trim $14.1 billion in spending in various departments and “refocus” the money to other priorities. The government expects to save $2.25 billion in the coming year, rising to $2.8 billion the year after and $3.6 billion in 2026/27.

While the Department of National Defence accounts for the largest single reallocation for the coming year — $810 million — its overall spending is expected to rise 1.1 per cent to $30.6 billion.