A bold move by the Carney administration has sparked controversy and concern across Canada. The federal budget, unveiled on Tuesday, plans to reduce the public service workforce by a staggering 16,000 positions over the next three fiscal years. This equates to approximately 4.5% of the current public service workforce, a significant cut that aims to bring the bureaucracy back to a "more sustainable level."
But here's where it gets controversial: an expert has described this target as "relatively modest," even as public sector unions brace for impact. The proposed reductions are expected to commence in April 2026 and continue through to 2029, according to the budget documents.
The government justifies this move by citing the growth of the public service, which has expanded at a rate far greater than the Canadian population. In fact, the public service peaked in 2024 with just under 370,000 employees. Finance Minister François-Philippe Champagne emphasized the need to bring the civil service back to a more sustainable level, but he also assured that the process would be compassionate.
As of March this year, there were over 357,000 public servants across Canada, with a significant 43% of them based in the National Capital Region. The federal government is the region's largest employer, so these cuts will undoubtedly have a local impact.
Of the 16,000 full-time positions to be cut, 650 will come from executive roles, representing around 7% of the executive staff. These reductions are part of a larger goal to reduce the public service workforce to approximately 330,000 by March 2029, a decrease of around 40,000 from the all-time high in 2024.
This move stands in stark contrast to last year's budget, which promised a much smaller reduction of 5,000 public service jobs over several years. The government sees these savings as part of a broader plan to rein in spending and generate approximately $60 billion in savings and revenues over five years. This strategy is intended to offset Prime Minister Mark Carney's first budget, which proposes a deficit of roughly $78 billion.
However, the budget still needs to pass through a confidence vote in Parliament.
And this is the part most people miss: the impact on local communities. Ottawa Mayor Mark Sutcliffe expressed deep concern about the potential job losses, emphasizing the human cost of these cuts. "These are members of our community facing the loss of their livelihood," he said. Sutcliffe called for a comprehensive transition plan for employees exiting the public service, suggesting the need to diversify Ottawa's economy, including through defense spending, to mitigate the impact of these changes.
The budget's public service cuts are part of a comprehensive expenditure review launched by Ottawa in July. The government has stated its commitment to minimizing hardship for federal employees, but the details of how these reductions will be achieved remain unclear. The budget document proposes offering a voluntary early retirement incentive program through the pension plan, which is estimated to have a net fiscal impact of $1.5 billion over five years.
Sharon DeSousa, national president of the Public Service Alliance of Canada, has criticized the cuts as "drastic," arguing that they will only lead to the government having to replenish its ranks. She draws parallels to previous cuts under the Harper administration, where public service was cut, chopped, and dismantled, only to be staffed up again when it didn't work.
In the coming weeks, departments are expected to communicate specific measures to staff and unions. The federal government has indicated it will continue to identify more efficiencies and potential savings, which will be shared in the next fiscal year's departmental plans and estimates.
Sahir Khan, vice-president of the University of Ottawa's Institute of Fiscal Studies and Democracy, reviewed the budget documents and described the proposed cuts as relatively modest in terms of getting the public service back to a pre-pandemic size. However, he noted the lack of detail regarding which departments and programs will be affected and the potential impact on their missions.
The reductions are expected to occur through normal attrition, retirements, and other departures, as well as further actions to slow spending. This process has already begun, with the bureaucracy reduced by approximately 10,000 employees from 2024 to 2025.
The government's focus is on improving productivity and efficiency in the public sector, with a strong emphasis on modernizing government operations. Various departments are planning to simplify processes, reduce duplication, and utilize automation and artificial intelligence to increase productivity. For example, the Department of Justice, Shared Services Canada, Transport Canada, and Public Services and Procurement Canada are among those starting to implement AI in different aspects of their workflows.
Other departments are making savings by reducing the frequency and level of detail in data collection, cutting international development funding, and consolidating embassies to reduce mission expenses. Immigration, Refugees, and Citizenship Canada are also making targeted adjustments to programs like the Interim Housing Assistance Program, which supports asylum claimants.
Khan believes that for the public servants who remain, the demands will be high. He suggests that the public confidence in the public service has dropped over the years, and this ambitious budget will require equally ambitious leadership and a focus on speed and quality of execution from public servants.
So, what do you think? Is this a necessary step to rein in spending and improve efficiency, or is it a drastic measure that will impact the quality of public services and the lives of public servants? We'd love to hear your thoughts in the comments below!
