The federal government is cutting research into medical uses of marijuana to save $4 million, as part of $1 billion in savings it expects to make over the next two years.

Treasury Board president John Baird mentioned the cut as one example of about $20 million in specific savings he described in a short briefing on Monday. The savings will total slightly more than $1 billion over the next two years according to the Department of Finance website.

Treasury Board president John Baird will cut $1 billion from government spending.
(CBC)

The savings result from cuts in four categories, Baird said:

• Programs that are not delivering value for money.
• Programs that didn't spend all the money allocated.
• Work that could be done more efficiently outside the government.
• Programs that don't meet the needs of Canadians.

The marijuana research program falls into the last category.

The single largest saving, at nearly $380 million, will be made by reclaiming unspent money. 

Eliminating the visitor rebate program, under which Revenue Canada refunds GST to foreign visitors, is the single largest program cut, saving $78.8 million.

"We have uncovered numerous examples of waste and duplication," Finance Minister Jim Flaherty said.

The ministers said they expect criticisms, especially from the Liberals. But Baird said the Liberals "could never say no to a bad idea."

The savings amount to less than one per cent of the government's program spending, based on actual spending of $57.9 billion in the first four months of the current fiscal year, which ends next March 31.

Surplus will cut debt

The government also said it had a $13.2 billion surplus for the fiscal year that ended last March 31, which will be used to pay down the national debt, Flaherty said.

"It's not a discretionary element," TD Bank chief economist Don Drummond told CBC News.

Unless the government decides before the fiscal year end to spend the surplus or part of it, the money must be used to cut the debt.

"There is nothing else at this time that can be done with the remaining $13.2 billion but to pay it to the debt," Drummond said.