New documents show Heritage Minister James Moore's office balked at the initial quote for Diamond Jubilee festivities.
"In January 2011, your office reviewed the cost estimate for the Diamond Jubilee framework and asked that it be reduced from $8.8 million to $7.5 million," says a briefing note to Moore.
The Canadian Press obtained the document under the Access to Information Act.
Celebrations are set to kick off across Canada next month to commemorate the day Queen Elizabeth II became sovereign on the death of her father, King George VI.
Last month, the heritage minister announced scaled-back spending of $7.5 million on Diamond Jubilee celebrations. That includes $2 million for events in the Queen's honour, and $3.7 million for 60,000 special medals for civic-minded Canadians.
"By supporting this most historic and significant anniversary, our government is delivering on its commitment to reinforce our heritage through active celebration of our institutions that define who we are as Canadians," Moore said in a statement.
The Department of Canadian Heritage has also ordered more than half a million Diamond Jubilee flags, while a Canadian Forces regiment had a brooch encrusted with 60 diamonds made specially for the Queen.
Prime Minister Stephen Harper's Conservatives have unabashedly embraced the monarchy since coming to power. The Tories restored the word 'royal' to the names of the navy and air force and insisted the Queen's picture is prominently displayed in embassies and at Foreign Affairs headquarters.
So why the penny-pinching over the Queen's big party?
Moore's spokesman, James Maunder, said the government isn't spending any extra money on the festivities.
"The funds to honour Her Majesty's Diamond Jubilee come entirely from existing departmental resources," Maunder said in an email.
"The adjusted number was arrived at after some fine-tuning of the expected costs."
Preparations to mark the milestone started two years ago.
In late 2009, the government struck a 14-member committee chaired by Canada's secretary to the Queen to advise Moore on Canadian celebrations.
The committee is comprised of representatives from the provinces, territories and non-governmental organizations, as well as officials from Citizenship and Immigration, National Defence, the Royal Canadian Mounted Police and Canadian Heritage.
The group based its initial $8.8-million estimate on the cost of the Queen's Golden Jubilee in 2002, adjusted for inflation, says another memo to Moore. Those celebrations a decade ago, which included a royal visit, cost $7 million.
"We're proud of our investment," Maunder wrote. "It was arrived at with consultation, care and above all else, respect for taxpayers."
The Queen has not announced a Canadian tour this time around, but Prince Charles and Camilla will visit as part of a worldwide royal blitz during the Diamond Jubilee year.
Prince William and his wife, Kate Middleton, who spent nine days touring Canada last year, will travel to the South Pacific. Prince Harry is going to Belize, Jamaica and the Bahamas.
The Queen and her husband, Prince Philip, will attend events across Britain.
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