Budget 2025 Introduces a 'Transformational' Era for the Federal Public Service
The 2025 federal budget plans to reduce the size of the public service while introducing new measures to improve efficiency and build for the future. It forecasts cutting an estimated 16,000 full-time equivalent positions over three years, roughly 4.5% of the current workforce.
Staff Reductions and Executive Cuts
- Up to 1,000 of the cuts will affect executive positions.
- By 2028-29, the public service workforce is expected to be 40,000 fewer than its 2023-24 peak.
Changes Affecting Federal Public Servants
Many public servants, especially those in the National Capital Region—the largest employer being the federal government—will experience various adjustments.
"This is a transformational time for the public service to revisit how we work, how we can improve services to Canadians and how we can build for the future,"
Early Retirement Incentive Program
The budget proposes amending pension and tax rules to introduce a voluntary Early Retirement Incentive (ERI) through the Public Service Pension Plan. Eligibility includes employees aged 50 or older, with at least 10 years of employment and two years of pensionable service.
Other Initiatives
- Reducing reliance on external consultants.
- Introducing a made-in-Canada AI tool to be implemented government-wide.
This budget aims to reshape the federal public service by reducing its size, modernizing workforce policies, and enhancing technological capabilities.
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