The federal budget outlines a three-year plan to cut 16,000 public service jobs, aiming to reduce spending and streamline government operations.
Federal Workforce Reduction Announced
The federal government unveiled a budget Tuesday outlining plans to cut approximately 16,000 public service positions over the next three fiscal years. The reductions represent about 4.5 per cent of the national public service and are intended to return the workforce to what officials call a “more sustainable level.” Cuts are set to begin in April 2026 and continue through 2029.
Reasoning Behind the Cuts
Finance Minister François-Philippe Champagne stated that the size of the public service has expanded faster than Canada’s population growth in recent years, reaching nearly 370,000 employees at its peak earlier this year. The government says scaling back is necessary to control federal spending and support a broader plan to generate about $60 billion in savings and revenue over five years. Champagne emphasized the intent to proceed “compassionately,” seeking voluntary departures where possible.
Scope of Positions Affected
Budget documents indicate that 650 executive roles will be included among the reductions, accounting for roughly seven per cent of federal management positions. The overall goal is to reduce the workforce to around 330,000 public servants by March 2029—down roughly 40,000 from the 2024 high. The largest concentration of affected workers is in the National Capital Region, where almost half of federal employees are based.
Impact on Ottawa and Local Concerns
Ottawa Mayor Mark Sutcliffe expressed concern for workers who may lose their jobs, noting the federal government remains the region’s largest employer. Sutcliffe urged the federal government to support transition pathways and invest in efforts to diversify local economic opportunities, particularly downtown. He also highlighted the importance of expanding sectors like defence and technology to soften the economic effect of job losses.
Plans for Implementation and Attrition
The cuts are part of a comprehensive expenditure review launched in July. The government plans to lean heavily on attrition, early retirement incentives, and voluntary departures to reduce the number of layoffs. A voluntary retirement program is expected to roll out between January 2026 and early 2027, with a projected fiscal impact of $1.5 billion over five years. Public sector unions, however, warn the reductions may strain service delivery and require future rehiring.
Union and Expert Reactions
Sharon DeSousa, national president of the Public Service Alliance of Canada, described the cuts as “drastic,” citing previous periods when federal downsizing led to reduced service performance and later workforce rebuilding. Policy analysts suggest the proposal remains moderate compared to pre-pandemic staffing levels but caution that the government has yet to specify which departments will lose positions. Without clear departmental breakdowns, analysts say the long-term operational impacts remain uncertain.
Looking Ahead
Departments are expected to release more detailed implementation plans in the coming months. The government notes it will continue modernizing operations, including increased use of automation and artificial intelligence to improve efficiency. The budget remains subject to approval in a parliamentary confidence vote, meaning final authorization of the reductions is still pending.
