Budget 2025: Federal Public Service Job Reductions Announced
Ottawa plans to introduce an early retirement incentive program for employees aged 50 and older with at least 10 years of service. This offer allows early retirement without penalty as the government prepares for job cuts.
Projected Job Losses and Savings
Approximately 16,000 federal public service positions are expected to be eliminated over the next four years as part of the Liberal government's spending review. The budget released Tuesday outlines departmental targets to save a combined $13 billion annually by 2028-29.
Public Service Overhaul
The federal public service will undergo a significant reduction, cutting 40,000 full-time roles by 2028-29. Nearly half of these cuts will come from internal government savings measures.
“We are modernizing government operations to deliver better results for Canadians and reduce costs,” the budget states. “To meet the moment, we must reinvent government to be fit for the 21st century.”
“This means recalibrating activities and fiscal room towards our core mandates — spending less on the day-to-day running of government.”
Financial Outlook Without Spending Cuts
The Parliamentary Budget Officer (PBO) warns that without these spending reductions, staff costs could rise by $7 billion by 2029-30.
Workforce Growth Since 2015
The federal workforce has expanded steadily since the Liberals took office in 2015, reaching nearly 369,000 full-time employees in 2023-24, according to Treasury Board data.