The numbers released in the country's public accounts show Ottawa's total expenses came in $9.9 billion lower in the fiscal year 2011-12 than was projected in the June 2011 budget.
Program expenses were $8 billion lower — the rest came from a decrease in interest charges to service the debt.
The headline for the report was that the deficit for the year was $26.2 billion.
While higher than Ottawa's most recent estimate, it was actually $6 billion less than what Finance Minister Jim Flaherty expected when he handed in the budget in June 2011.
Ottawa had released the adjustment in the deficit earlier this month.
Previous reporting, including from the government's monthly fiscal monitor, had pointed to slowing spending growth, but the national accounts calculation released Tuesday shows just how dramatic the drop has been.
Overall, spending for the 2011-12 fiscal year was only $1 billion above the previous year, or a 0.4 per cent increase, well below the inflation rate.
Asked about the dramatic change, Flaherty said it shows the government is doing its job.
"We're controlling spending, that's something the government of Canada has control over," he said, noting that Ottawa is helpless to combat global forces that are dragging down the economy.
Flaherty would not break down how savings were achieved, but said a portion comes from the phasing out of the government stimulus introduced during the recession.
He added the numbers also don't signal that Ottawa is preparing more cutbacks in the future.
On the revenue side, the government took in $3.9 billion less than it had expected when it handed down the budget, reflecting weaker than projected economic growth.
On Monday, Flaherty said he expects revenues will again be lower than anticipated this fiscal year, but said he remains on track to reduce the deficit because of the government's restraint program.