The recent federal budget announcement outlines plans to cut 16,000 positions from the public service workforce, representing about 4.5% of employees, over the next three fiscal years. This reduction aims to bring the bureaucracy to a more sustainable level, as stated by Finance Minister François-Philippe Champagne. The plan is considered relatively modest by experts, despite concerns from federal public sector unions.
Starting in April 2026 and continuing until 2029, the downsizing initiative is part of the government’s effort to align the public service workforce to a more manageable size, as it had expanded significantly compared to the Canadian population, peaking at nearly 370,000 employees in 2024.
Of the 16,000 positions to be cut, 650 will come from executive roles, accounting for about 7% of the executive staff. The ultimate goal is to reduce the workforce to around 330,000 public servants by March 2029, which is approximately 40,000 fewer positions than the peak in March 2024.
This move follows last year’s budget commitment to eliminate 5,000 public service jobs over several years. The restructuring aims to generate approximately $60 billion in savings and revenues over five years to help offset the $78 billion deficit in Prime Minister Mark Carney’s budget.
Ottawa Mayor Mark Sutcliffe expressed concern about the job cuts, emphasizing the importance of a transition plan for affected employees seeking opportunities in other sectors. Diversifying Ottawa’s economy, particularly through defense spending and boosting economic activities downtown, could help mitigate the impact of these changes.
The government plans to minimize the impact of job reductions through attrition and voluntary departures, offering an early retirement incentive program starting in January 2026. However, Sharon DeSousa, the national president of the Public Service Alliance of Canada, criticized the drastic nature of the cuts and emphasized the importance of proper consultation.
The budget highlights the government’s commitment to identify efficiencies and potential savings, with more specific measures expected to be communicated to departments and unions in the coming weeks. The focus remains on enhancing productivity and efficiency in the public sector through modernization and the adoption of automation and artificial intelligence technologies.