As the federal government undergoes a spending review, Prime Minister Mark Carney is aiming to find $25 billion in savings over the next three years, according to a senior government source who spoke to CTV News.

News of the target figure comes after Finance Minister François-Philippe Champagne, along with Treasury Board President Shafqat Ali, issued letters to Carney’s cabinet on Monday, asking them to present plans by the end of summer to find “ambitious” savings ahead of this fall’s budget.

According to a spokesperson from Champagne’s office, ministers must find 7.5 per cent savings for the 2026-27 fiscal year that begins on April 1, 2026, followed by 10 per cent in 2027-28 and 15 per cent in 2028-29 – with the goal of finding “long-term savings.”

The Toronto Star was first to report the $25 billion savings target.

In a new video posted to X on Thursday, Carney reiterated his promise to “spend less, invest more,” which he first pledged to do during the federal election.

“We’ll spend what we need to, with the money we already have,” Carney said in the video.

During the federal election campaign, Carney also committed to balancing the federal government’s operating budget by 2028, and to divide the budget into two new categories – operating costs and capital investments. He also pledged to cap – and not cut – the public service.

Speaking to CTV News, Professional Institute of the Public Service of Canada President Sean O’Reilly, who represents as many as 70,000 public service members, called the $25 billion savings target “a very surprising number” given it’s so “large.”

“I have major concerns for how it will affect my members and their employment,” O’Reilly said, adding he is also worried about how potential job cuts could impact services and “affect everyday Canadians and their ways of life.”

Earlier this week, unions received a briefing from the federal government outlining the current expenditure review, but O’Reilly said conversations have “been very lacking.”

While O’Reilly also conceded there are “potential places we could find to reduce spending,” he also said he is concerned potential job losses could go beyond attrition.

Sahir Khan, who is the executive vice-president of the Institute of Fiscal Studies and Democracy, says he believes the review is about reallocating money to reach new spending commitments, like a middle-class tax cut and a $9.3 billion boost to meet NATO’s defence spending target of two per cent of GDP by this fiscal year.

“I don’t think the cuts of the public service are kind of the first priority. I think the first objective here is to create a pool of opportunities that they could look at for reallocation,” Khan said.

Khan also said Canadians should not expect to see the public service grow and instead see workers “go where the money is,” referring to departments like National Defence and the Canada Border Services Agency, which are getting more emphasis under the current government.

Statistics released by the Treasury Board of Canada Secretariat in the spring show 357,965 people worked for the federal government as of March 31, down from 367,772 people in 2024.

Asked on Thursday how she will find 7.5 per cent of savings for her department in the next fiscal year, Foreign Affairs Minister Anita Anand would not specify but said “there is work to do.”

“This is a time where we need to focus on reducing our expenditures on the one hand but continuing to offer the key programs that our citizens rely on,” Anand said while speaking to reporters from Malaysia, adding social programs like the Canada Child Benefit and $10-a-day childcare will not be impacted by the review.

Two years ago, Anand asked her cabinet colleagues to find $15.4 billion in government spending cuts by 2028 when she served as Treasury Board President under former prime minister Justin Trudeau.

On top of the expenditure review, the federal government also announced on Wednesday that it is launching a “red tape review” of regulations across all federal departments and agencies with regulatory responsibilities in a bid to cut “unnecessary red tape.” Ministers will have 60 days to review regulatory responsibilities and report back on their organizations’ progress and next steps.