Budget ushers in 'transformational' era for federal public service

The 2025 federal budget outlines a major restructuring of Canada's public service. It seeks to reduce workforce size while introducing incentives and technological upgrades across government operations.

Workforce Reduction and Outlook

The plan aims to cut approximately 16,000 full-time equivalent positions within three years, representing about 4.5 percent of the current workforce. Around 1,000 of these roles are expected to be executive-level positions. By the 2028-29 fiscal year, officials anticipate nearly 40,000 fewer public servants compared to 2023-24, when employment levels reached their highest point.

Key Changes for Public Servants

Significant numbers of federal employees working in the National Capital Region will be affected by these adjustments. The changes include a focus on service improvement, innovation, and efficiency through new technologies.

"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 and Incentive Program

Budget 2025 also introduces a voluntary early retirement incentive under the Public Service Pension Plan. The proposal would amend superannuation and tax regulations to support this program. Employees aged 50 and older, with a minimum of ten years of employment and at least two years of pensionable service, would qualify to apply.

Innovation and Technology

The government plans to develop and implement a domestic artificial intelligence tool to enhance operations across federal departments, aiming to reduce dependency on external consultants.

Author’s summary: The 2025 budget seeks to reshape Canada’s public service through staff reductions, retirement incentives, and integration of homegrown AI solutions.

CBC — 2025-11-05