The 2025 federal budget has introduced what the government calls a "right-sizing" initiative, but economist William Watson questions whether this approach will fundamentally change Ottawa's spending habits or simply repeat past patterns of inefficiency.
Budget Promises Versus Reality
While the budget proposes to focus on core priorities, eliminate duplication, and end programs that don't work, Watson notes this should have been standard practice all along. The author, who initially criticized the budget harshly, acknowledges some positive elements but remains skeptical about the government's ability to follow through on its efficiency promises.
The budget allocates $4.354 billion over five years to high-speed rail, despite ongoing challenges with existing rail systems in Montreal and Ottawa that struggle with cold weather conditions. Watson questions whether sufficient planning has been done to ensure this massive investment will deliver real returns rather than becoming another expensive infrastructure project.
Questionable Accounting and Program Changes
Watson raises concerns about the budget's accounting methods, particularly the classification of subsidized operating costs for private businesses as capital spending when they're "designed to unlock incremental large-scale private capital investments." This approach leaves unclear who determines which expenditures qualify as effective "un-lockers" of private investment.
The budget does make several program adjustments that Watson views positively: ending the two-billion tree pledge at one billion planted trees, eliminating the Underused Housing Tax, and axing the luxury tax on boats and airplanes. However, he questions why the medical marijuana compensation rate for RCMP and Veterans Affairs needed adjustment from $8.50 to $6 per gram, noting this change alone is projected to save $4 billion over five years.
Expenditure Review Details
The budget includes a 39-page section on comprehensive expenditure review aimed at reducing government costs by 4.9 percent, though specific details remain sparse. Some measures include the Canada Border Services Agency extending vehicle replacement cycles from 7 to 10 years, Canadian Heritage closing the "Gift Bank for Ministers and senior officials," and Statistics Canada scaling back collection of less relevant data sets.
Watson's central question remains: What incentives actually exist within government to encourage genuine efficiency and permanently eliminate programs that either don't work or are no longer needed? Without addressing this fundamental issue, he suggests that "right-sizing" may simply become the latest government buzzword rather than a meaningful change in how Ottawa manages public funds.
