The Canadian tech sector's proposed government budget cuts are an absolute horror show
Build Canada is doing nothing to beat the Canadian DOGE allegations.
The latest memo from pseudo think-tank Build Canada is a line-by-line proposal of how to make Canada’s federal government more efficient, and the jist of it is by making a lot of spending cuts — $35.1 billion, to be exact.
Build Canada is a group of business leaders, many of whom are involved with the tech industry, that has been publishing memos proposing policy ideas “for growth, innovation, and prosperity.”
The conservative nature of some memos, public statements from those involved, and an obsession with efficiency have led to comparisons to the tech industry’s Trump-courting rightward shift in the U.S., as well as DOGE, the Elon Musk-led project that has taken over numerous government services and departments.
One way Build Canada’s memo proposes getting the budget down is dropping operating expenses by 15% to 20%, including by reducing public service staff. But it also analyzes the funding, grants, and transfer payments each department provides to see if they could be reduced or cut entirely. The criteria for being on the chopping block includes not serving the public interest; not being something the government should handle; things that could be handled by provinces or privatized; anything that could be made more efficient; or programs that aren’t affordable.
I could spend a lot of time picking out each and every bad idea in the proposal (feel free to do so yourself here) but a few things really caught my attention.
Indigenous people get the worst of it: Build Canada proposes that the Department of Indigenous Services cut $3.1 billion from the grants and contributions it pays out, the most of any department. That money currently goes to projects ranging from building/maintaining community infrastructure, to economic development, to education programs, among many others.
There are also $633.8 million in cuts for programs geared towards Indigenous communities and Truth & Reconciliation initiatives managed by other departments.
The proposal also suggests cutting $252 million in grants from the Department of Crown-Indigenous Relations and Northern Affairs, including money meant for implementing treaty agreements and settling land claims.
DEI pushed aside: The memo proposes ending funding to the Canada Race Relations Foundation (CRRF), as well as shutting down the Department for Women and Gender Equality and shifting gender-based violence programs to the Department of Justice.
While the CRRF itself represents only $9 million in spending, the memo also proposes cutting $38.8 million in various anti-racism programs from other departments.
Citation needed: The memo justifies those cuts by claiming single-gender and race-based approaches to poverty and inequality are less effective than “universal, needs-based” approaches, citing “data” and “studies.” Maybe I wasn’t exhaustive enough, but I couldn’t find any data that backed up these claims.
What was easy to find was research that reinforced the importance of considering race and gender when addressing poverty — in fact, systemic racism and gender-based discrimination were among the “needs” that should be addressed.
One link that is provided comes after a claim that universal programs reduce income gaps by 20%, double that of gender-only initiatives. But the study linked to has nothing to do with gender or race. Rather, it’s economist Ian Gough’s argument for Universal Basic Services (UBS), a policy alternative to Universal Basic Income (UBI) that — instead of giving every citizen a guaranteed minimum income — makes services like health care, housing, higher education, transportation, and food available to everyone.
Nothing in Build Canada’s memo advocates for creating a UBS-like model for service delivery. But that would require expanding the funding to government programs (or at least redirecting existing spending).
Gough’s argument is also highly skeptical of privatization and its ability to fairly deliver services people need — and one reason UBS advocates favour it over UBI is that UBI could be exploited by the private sector.
The 20% figure also doesn’t appear in the linked study, but it is one frequently cited by UBI advocates.
The memo seems to be using “universal” to mean “not delivered to specific races or genders,” and not “delivered to every person without needs testing,” as the lone source intended.
Gutting the media: The analysis doesn’t seem to account for the economic impact of job losses that would come from grant and program cuts, something that is exemplified in how it treats Canada’s media sector. One of the headline items is saving $346 million by slashing the CBC’s budget by 25%, echoing points made by Pierre Poilievre that it should focus on French services and other areas that have high public support.
In 2011, a Deloitte analysis found that CBC contributed $3.7 billion to the Canadian economy in a year when the public investment was $1.1 billion.
It has been some time since CBC’s economic impact has been assessed, though it is presumably lower today because of budget cuts and downsizing that have reduced its ability to employ Canadians and fund Canadian work.
The memo claims CBC is losing public support, but a recent survey found that 79% of Canadians feel it is equally or more important than ever, with 57% believing its funding should either stay the same or increase.
Other suggestions by Build Canada would also be devastating to the media sector, like cutting the government’s $154.1 million contribution to the Canada Media Fund, equal to roughly 43% of its planned contributions for the 2024-25 year. The CMF funds Canadian-made TV and digital content — the tens of thousands of projects it has funded include things from Schitt's Creek and Orphan Black to Degrassi and Murdoch Mysteries. The long lists of credits at the end of those shows are jobs supported by the CMF.
In addition to the government, the CMF gets its money from cable, satellite, and streaming services, which must contribute 5% of their local revenues as a condition for being allowed to operate on Canada’s airwaves and digital infrastructure.
But with broadcasters struggling, a version of the CMF that relies solely on private sector contributions will likely be less and less effective at funding Canadian projects.
Another pitch is ending the $84.8 million Canada Periodical Fund, which provides support to magazines, community newspapers, and digital outlets. That would decimate journalism at the national and local levels, both in terms of the people they can employ and their ability to keep Canadians informed about their country and communities.
Prioritizing privatization: At least some of the cuts seem to be made on the assumption that the private sector would pick up the slack and do a better job, an idea not everyone agrees with.
One poll the memo cites, conducted by the Fraser Institute in 2023, found that 16% of Canadians believed they got good value from Canadian government services (though an additional 23% said they got “satisfactory” value).
An Angus Reid survey later that same year found that 54% of people who had accessed a federal government service in the last six months were satisfied with the experience, an upward trend from the previous year.
Under the Build Canada proposal, the Department of Health alone would transfer $116 million in services to the private sector. Even when they don’t directly suggest privatization, cutting back how much the government provides would surely push people and organizations in that direction: while the memo only recommends privatizing $16.3 million worth of climate change programs, reductions in numerous other climate- and emission-reduction projects mean entities might turn to the private sector to meet carbon reduction goals and obligations.
Lucy Hargreaves, the memo’s author, is a VP at Patch, a San Francisco-based market for corporate carbon credits.
One of the memo’s actually good ideas is to cut the Canada Infrastructure Bank, a first-term Trudeau initiative that has been largely ineffective in its goal of building infrastructure by creating private-public partnerships. But instead of listening to critics who said CIB funding was better used to create government-led projects — which can build infrastructure more efficiently — the memo pitches more private sector solutions.
To be blunt: These kinds of cuts would be a disaster. The author welcomes people to disagree with the proposed ideas, which are meant to start a conversation about what the government could cut, but doesn’t make a strong case for why this is a conversation we need to be having. The memo does not explain how cutting the size of the government would improve Canada’s GDP. The only way it suggests that the government could be more efficient with less resources are with better data sharing, different procurement methods, and using more AI (known to some as the “keeping getting things wrong machine”).
It’s also unclear why the government needs to cut billions in spending in the first place — as I previously wrote, the government’s interest payments on its debt are low right now, and a looming recession is the worst time for austerity measures.
The federal government could probably stand some reform, and there are plenty of programs that have fallen short of their intended goals. But efficiency doesn’t have to mean budget cuts, and history has shown us that austerity leads to worse and worse services as time goes on.
But most of all, Build Canada has me wondering exactly how exactly they decided whether or not a program was “valuable.” Because with all of these cuts, the version of Canada they put forward just seems like a really shitty place to live.