Budget 2025: Feds project 16,000 public service job losses as part of spending review

Budget 2025: Feds Project 16,000 Public Service Job Losses

Ottawa has introduced an early retirement incentive allowing employees aged 50 and older with over ten years of service to retire early without penalty. This move comes as part of a broader federal spending review projected to eliminate about 16,000 public service positions within four years.

The government’s budget, released on Tuesday, outlines departmental strategies aimed at generating $13 billion in annual savings by 2028–2029. The review also includes a major restructuring of the federal public service, which anticipates a total reduction of approximately 40,000 full-time roles by the end of the period, nearly half resulting from internal cost-saving initiatives.

“We are modernizing government operations to deliver better results for Canadians and reduce costs,” reads the budget. “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.”

Background and Future Projections

Since the Liberals took office in 2015, the federal workforce has gradually expanded, reaching nearly 369,000 full-time employees in 2023–2024, as noted by the Treasury Board. Without the proposed cost reductions, the Parliamentary Budget Officer warns that staff-related expenses could increase by $7 billion by 2029–2030.

Key Budget Objectives

Support early retirement for eligible employees.
Streamline government operations and spending.
Save an estimated $13 billion annually by 2028–2029.
Reduce public service headcount by roughly 40,000 roles.

Author’s summary: The Canadian government’s 2025 budget aims to slim down the federal public service and achieve $13 billion in annual savings through job cuts and modernization initiatives.

iPolitics — 2025-11-05