Government house leader warns of ‘tough choices’ ahead of fall budget

Government house leader Steven MacKinnon says ‘Canada will continue to be a leader’ in renewable energy, but questions remain if Canada will reach its 2030 goal

Government House Leader Steven MacKinnon is warning the federal government will have to make “tough choices” ahead of the fall budget that is set to be unveiled in October.

• Federal government to table first budget under Carney in October: finance minister

“The government has run a large deficit since the pandemic, when we were there to support Canadians, and now we have some choices to make so that we can get our finances in control,” MacKinnon said in an interview with CTV Question Period, airing Sunday.

Prime Minister Mark Carney recently characterized the upcoming budget as one of both “austerity” and “investment.”

“What the government is going to do, what we’re in the process for the next budget, is focusing on reducing waste, reducing unnecessary federal spending, reducing duplication in federal spending, (and) becoming more efficient in federal spending so that we have the room,” Carney told reporters earlier this week in St. John’s, N.L.

Finance Minister François-Philippe Champagne, along with Treasury Board president Shafqat Ali, asked ministers over the summer to find up to 15 per cent savings in day-to-day operational spending over the next three years.

• Mark Carney’s cabinet told to present savings plans by the end of the summer

When asked by reporters earlier this month about the potential for public service cuts, Champagne acknowledged “there’ll be adjustments in different places.”

Carney, meanwhile, has faced questions over how he will reach his election promises of “capping, not cutting” the public service and eliminating $15 billion a year by 2028, while also spending billions of new dollars on defence and tariff supports.

The Liberal election platform also pledged to protect public services like childcare, dental care and pharmacare.

When asked by host Vassy Kapelos whether the federal government will honour the pledge to cap, not cut, the public service, MacKinnon said, “we’re not going into this with a view to reducing head count.”

“We’re going into this with a view to assessing the appropriate role for the federal government in various parts of the economy.”

Pressed again by Kapelos on how the federal government can cut spending while also keeping programs, MacKinnon admitted, “there are going to be tough choices.”

“I do not want to sugarcoat the fact that tough choices will need to be made, and this is a government that’s prepared to make them in the interest of creating a future for our young people, in the interest of supporting those who are most vulnerable, and in the interest of keeping those programs like health care and other investments that we continue to make,” he said.

A report from the Parliamentary Budget Officer released in August estimated the federal government would spend $71.1 billion on public service personnel costs in 2024-25, rising to $76.2 billion by 2029-30.

Unions like the Public Service Alliance of Canada, meanwhile, have cautioned against cuts, saying they would affect both workers and services for Canadians.

The size of the federal public service has increased by more than 100,000 workers in the last 10 years, going from 257,034 in 2015 to 357,965 in 2025. That number has decreased, though, by nearly 10,000 people since last year.

Will Canada drop its emissions cap?

The federal government’s climate agenda will be another major focus during the fall sitting of Parliament, as Ottawa develops a new climate competitiveness strategy that Carney has said will focus on “results over objectives.”

A Reuters report on Friday said the federal government may drop its oil and gas emissions cap if energy companies and Alberta reduce their carbon footprint in other ways.

When asked by Kapelos about the report, MacKinnon wouldn’t answer directly but said Canada “is going to continue to be a world leader in climate technology.”

Speaking to reporters in Winnipeg on Friday, Energy and Natural Resources Minister Tim Hodgson said the federal government is in discussions with Alberta and oil companies about oilsands emissions.

In a separate interview with CTV Question Period airing on Sunday, Alberta Premier Danielle Smith said she “conveyed to the prime minister” that the emissions cap should be rescinded.

“What this prime minister seems to understand is you cannot put arbitrary interim targets in place. 2030 is only five years away. 2035 is only 10 years away,” Smith told Kapelos. “There just simply isn’t enough time to try to achieve some of the aggressive targets that his predecessor had put forward without causing these projects either to be canceled altogether or to be shut in.”

Smith met with Carney on Wednesday in Edmonton and said the prime minister is showing “some pragmatism there that’s very positive.”

But the federal government is facing questions over whether it will maintain its targets to reduce emissions by 40 to 45 per cent from 2005 levels by 2030 and 45 to 50 per cent by 2035.

• Industry minister Joly won’t say if federal climate targets are here to stay

In an email to CTV News last week, a spokesperson for Environment and Climate Change Minister Julie Dabrusin wrote that Canada is “committed to reaching net-zero emissions by 2050,” but also said “the federal government will provide an update on its emissions reductions plan as we strive towards our 2030 and 2035 targets.”

Pressed by Kapelos on why the federal government won’t be explicit with Canadians about changes to emissions targets, MacKinnon deferred to Dabrusin.

“The environment minister and other ministers will, at the appropriate times, come forward with the various projections and updates,” he said.

The fall sitting of Parliament begins on Monday.