Finance Minister Jim Flaherty will slash almost $30 million a year in public funding for federal parties, in a move that would save taxpayers' money but deal a major financial blow to opposition parties, CTV News has learned.

Flaherty will present the measures in his fiscal update at 4 p.m. tomorrow.

"The government intends to run the economy and run the budget in a responsible way," he said Wednesday.

Currently, the major federal parties get $1.95 per vote on an annual basis. In the last election, roughly 14 million eligible voters cast their ballots, which translated to $27 million in taxpayers' money for the parties each year.

Under the new proposal, this is how much the parties stand to lose:

• Conservatives: $10 million
• Liberals: $7.7 million
• NDP: $4.9 million
• Bloc Quebecois: $2.6 million
• Green Party: $1.8 million

While the Conservatives would lose the most money, it would be a smaller share of their overall revenue because they get most of their funding through private donations.

"They're going to have a hell of a fight on their hands. This is not the way to behave in a democracy," Liberal leadership contender Bob Rae told CTV News.

In 2007, the Conservative Party received just 37 per cent of its funding from the public subsidy, according to The Canadian Press. That's far lower than the other parties, including the Liberals:

• Bloc Quebecois: 86 per cent
• Green Party: 65 per cent
• Liberals: 63 per cent
• NDP: 57 per cent

It was former Liberal prime minister Jean Chretien who first implemented public funding through general elections, and critics say it heavily favours whichever party is currently in power.

"For the smaller parties, this public funding is what allows us to participate fully in democracy," said New Democrat MP Pat Martin.

It's unclear how the Green Party would be able to stage an effective cross-country campaign without the money, especially since they were unable to elect a single MP to Parliament.

Sources say Flaherty will also present measures to curb the pay of Parliamentarians and top civil servants. That would include curtailing a planned $4,600 pay hike for MPs, CTV's Ottawa Bureau Chief Robert Fife reported.

Opposition parties support freezing salaries. Anthony Rota, the Liberal caucus chair, said "we're wiling to do our share as far as restricting and looking at what can be done with MPs' salaries."

But other opposition members also said the Conservatives should rein in their own spending, noting that Harper's cabinet has increased in size from 26 members to 37.

"Will the prime minister reduce his cabinet to a sensible level?" Liberal MP Wayne Easter asked during question period Wednesday. "Cut the 37 limo services and cut the bloated staffing."

With a report by CTV's Robert Fife in Ottawa