Ottawa’s spending review highlights B.C.’s lack of ambition
Federal review sets clear goals, exposing B.C.’s weak and opaque plan
Earlier this year, I argued that British Columbia should take a page from the Chrétien-Martin government’s 1990s spending review to help address its fiscal situation. This review was a principled and methodical exercise that reined in out-of-control spending and helped pull Canada back from the fiscal brink. But if that example feels too distant, the federal government just handed B.C. a more contemporary playbook to follow.
A few weeks ago, the federal government tabled its long-awaited Budget 2025. While not as transformational or generational as advertised, it did at least acknowledge some of the structural weaknesses in Canada’s economy. The budget rightly points to “weak productivity and chronically low business investment” as causing our lacklustre economic performance over the past ten years.
Ottawa also conceded that operational spending and the size of the public service have grown far beyond what taxpayers can afford. The government called the rise in the federal workforce “unsustainable.” In the government’s own words, “this has left federal finances strained, and put the vital services and programs that Canadians rely on at risk.” The federal public service has increased by 40 per cent over the past ten years, which is more than twice the growth in Canada’s population over the same time period (17 per cent).
To start correcting course, the government is launching what it calls a “Comprehensive Expenditure Review.” This is a plan to save $60 billion over five years (roughly two per cent of all total planned spending) by cutting duplication, consolidating back-office functions, and focusing resources on core priorities. About 40,000 federal positions will be eliminated through attrition and restructuring, returning the public service to 2022 employment levels by 2029-30. That’s a 10 per cent reduction from its peak of nearly 370,000 federal workers last year.
By contrast, B.C.’s savings goals, known as “Expenditure Management Targets,” look more like a rounding error. The province is aiming for $1.5 billion in savings over three years—about 0.5 per cent of all planned spending, or one-quarter of Ottawa’s target—with little public documentation to explain how it will get there. If B.C. matched the federal government’s target, it would mean roughly $5.8 billion of savings over three years, enough to cut the projected 2027-28 deficit nearly in half.
Workforce planning tells a similar story of the province’s lack of ambition. According to its own Budget 2025, the B.C. government intends to reduce the number of full-time equivalent (FTEs) employees by just 2.8 per cent over three years after expanding the provincial public service by an astonishing 42 per cent since 2017-18—that’s the same increase in employment the federal government created, but in fewer years. Ottawa’s downsizing, therefore, is more ambitious than B.C.’s.
It is worth noting that neither the federal nor provincial governments are proposing to slash essential services. What’s at issue is whether taxpayers are seeing good outcomes from massive public spending, and whether governments are disciplined enough to live within their means. With households and businesses tightening their belts for years, it is time for all levels of government to do the same.
Ottawa’s review is far less as ambitious as the Chrétien-Martin government’s 1990s spending review. But it’s more ambitious, transparent and methodical than Victoria’s current plan. As outlined in the federal budget, every department must justify its programs against three simple tests. Are they meeting their objectives? Are they core to the federal mandate? And do they complement, rather than duplicate, other levels of government? The budget also outlines the planned savings in each department for every year—a back-to-basics and transparent exercise that B.C. could and should adopt.
The message from both the 1990s and the 2025 federal budget is that fiscal credibility can only start being restored through methodical reform and ambition. If the Chrétien-Martin review was the fiscal equivalent to a home renovation, the Carney review is like a spring cleaning and B.C.’s review is more like making the bed. For B.C., it should be a reminder that good intentions and small symbolic gestures won’t steady a province with mounting debt, rising interest costs and repeated credit downgrades. It’s time to meet the moment.
Jairo Yunis is director of policy at the Business Council of British Columbia