Canada’s federal spending is growing, deficits are mounting, and waste is going unchecked. As governments look for ways to control costs, some experts say Canada needs a dedicated agency to root out inefficiency—before it’s too late.
One of the Trump administration’s policies is very good, in theory at least: the Department of Government Efficiency. While that term could be an oxymoron, like “political wisdom,” if DOGE proves useful, a Canadian version might be, too.
DOGE aims to identify wasteful, duplicative, unnecessary, or destructive government programs and replace outdated data systems. It also seeks to lower overall costs and ensure mechanisms are in place to evaluate proposed programs for effectiveness and value for money. This can, and often does, involve eliminating departments and, eventually, thousands of jobs. Some new roles within DOGE may need to become permanent.
The goal in the United States is to reduce annual operating costs and ensure government spending grows more slowly than revenues. Washington’s spending has exploded in recent years. The U.S. federal deficit now exceeds 6 percent of gross domestic product. According to the U.S. Treasury Department, the cost of servicing that debt is rising at an unsustainable rate.
Canada’s latest budget deficit of $61.9 billion in fiscal 2023–24 amounts to about 2 percent of GDP—less alarming than our neighbour’s situation, but still significant. It adds to the federal debt of $1.236 trillion, about 41 percent of our estimated $3 trillion GDP. Ottawa’s public accounts show expenses at 17.8 percent of GDP, up from about 14 percent just eight years ago. Interest on the growing debt accounted for 9.1 percent of revenues in the most recent fiscal year, up from 5 percent just two years ago.
The CTF also noted that Ottawa hired 108,000 additional staff over the past eight years, at an average annual cost of more than $125,000 each. Hiring based on population growth alone would have added just 35,500 staff, saving about $9 billion annually. The scale of waste is staggering. Canada Post, the CBC, and Via Rail collectively lose more than $5 billion a year. For reference, $1 billion could buy Toyota RAV4s for over 25,600 families.
Ottawa also duplicates functions handled by provincial governments, often stepping into areas of constitutional provincial jurisdiction. Shifting federal programs in health, education, environment, and welfare to the provinces could save many more billions annually. Poor infrastructure decisions have also cost Canadians dearly—most notably the $33.4 billion blown on what should have been a relatively simple expansion of the Trans Mountain pipeline. Better project management and staffing could have prevented that disaster. Federal IT systems are another money pit, as shown by the $4 billion Phoenix payroll debacle. Then there’s the Green slush fund, which misallocated nearly $900 million.
Even more worrying, the rapidly expanding Old Age Supplement and Guaranteed Income Security programs are unfunded, unlike the Canada Pension Plan. Their combined cost is already roughly equal to the federal deficit and could soon become unmanageable.
Canada is sleepwalking toward financial ruin. A Canadian version of DOGE—Canada Accountability, Efficiency and Transparency Team, or CAETT—is urgently needed. The Office of the Auditor General does an admirable job identifying waste and poor performance, but it’s not proactive and lacks enforcement powers. At present, there is no mechanism in place to evaluate or eliminate ineffective programs. CAETT could fill that gap and help secure a prosperous future for Canadians.
