Carney and Poilievre both want to stop wasteful spending. But what would they cut?

The debate surrounding Mark Carney’s proposed new budget framework is stirring up excitement among accountants and political observers alike. Carney, the leading contender in the Liberal leadership race, has put forth a plan that would separate the federal government’s operating and capital budgets. This distinction would differentiate between ongoing expenses for programs and services and spending for infrastructure, housing, and military equipment.

Carney aims to balance the operating budget within three years while running a small deficit on capital spending. He compares this approach to how homeowners manage their monthly bills while simultaneously investing in their property. However, expert opinions on Carney’s framework are divided. While Kevin Page, the former parliamentary budget officer, sees potential for easier scrutiny of government spending, economist Trevor Tombe has raised concerns.

Conservative Leader Pierre Poilievre has criticized Carney’s plan, accusing him of intending to hide deficits and cook the books. Poilievre believes that federal spending should be significantly reduced to combat inflation, which he attributes to government expenditures. On the other hand, Carney acknowledges the need to cut wasteful and ineffective spending while increasing investments in crucial areas.

When it comes to specific cuts, Poilievre has outlined targets like the housing infrastructure fund, the CBC, and foreign aid. He also plans to reduce the size of the public service and the use of outside contractors. Carney, on the other hand, has not provided a detailed list of programs to eliminate but has emphasized the importance of maintaining progress in areas such as child care, dental care, and pharmacare.

Both candidates have expressed their commitment to preserving transfers to individuals and provinces, which account for a significant portion of federal spending. However, Poilievre has cast doubt on certain programs like dental care and pharmacare, while Carney stresses the need to review operating spending without cutting essential transfers.

Ultimately, the debate over Carney’s budget framework goes beyond accounting practices to focus on the clarity of government spending priorities. While Carney believes his plan will offer greater transparency, Poilievre remains skeptical. The real challenge lies in determining where federal funds will be allocated and ensuring that programs impacting Canadians are adequately funded.