Federal government to cut another 28,000 public service jobs by 2029

Around 28,000 federal public service jobs are on the chopping block in the latest budget. CTV’s Austin Lee reports.

The federal government plans to cut another 28,000 positions from the federal public service as part of its plan to find $60 billion in savings over the next five years.

The Canada Strong Budget 2025 outlines the plan to reduce the size of the federal public service by 40,000 jobs through job cuts, attrition, and early retirements from its peak of 367,772 employees in March 2024, to 330,000 by 2028-29. There were 357,965 federal employees as of March 31, 2025.

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As part of the Comprehensive Expenditure Review, the government will reduce 16,000 full-time equivalent positions, including 650 executive positions, while another 12,000 positions, including 350 executive positions, will be eliminated through attrition and early retirement packages.

“These reductions will continue the trend towards a more sustainable public service size of roughly 330,000 by 2028-29, a decline of about 40,000 or 10 per cent from the 2023-24 peak,” Budget 2025 said.

“Attrition has, and will continue to be, a driver. The government understands that transitions can be difficult and is committed to minimizing hardship for federal employees, while also protective diversity in the public service workforce and ensuring a strong, younger generation of public servants.”

There were 9,430 executives in the federal public service as of March, according to the Treasury Board of Canada Secretariat.

Budget 2025 does not specify where jobs will be cut within the government or how much will be saved by cutting 28,000 more positions in the public service, but it does outline budget reductions in departments as part of the Comprehensive Expenditure Review to reduce budgets by up to 15 per cent.

“This will have a big impact on the Ottawa-Gatineau area,” David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives, told CTV News Ottawa.

“In terms of the likely impact in Ottawa, it’s going to be about 14,000 FTEs over this period 2024 to 2028.”

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A voluntary Early Retirement Incentive program will be launched to offer early departures for public servants. According to the budget, public servants aged 50 or above for Group 1 and age 55 and above for Group 2 who have at least 10 years of employment, with at least two years of pensionable service in the plan, may apply to participate in the early retirement incentive.

Early retirements are expected to cost $1.5 billion over five years.

The size of the federal public service increased from 257,034 in 2015 to 367,772 in 2024, before the size of the federal public service dropped by 10,000 by March 2025.

Ottawa Mayor Mark Sutcliffe said the news of 28,000 additional job cuts in the federal public service creates “uncertainty.”

“So, I think, the sooner the government has more details on exactly how those reductions will be carried out, who will be affected, what departments, which individual employees, and what the plan is to support those people through the transition, how many of them will be through attrition, early retirement, those kinds of things, the better,” Sutcliffe told reporters.

“I’d love to see some more details on that because, in the absence of those details, it creates uncertainty.”

As the federal budget was tabled, the Public Service Alliance of Canada (PSAC) released a survey suggesting a majority of respondents oppose widespread layoffs in the federal public service. The survey, conducted by Crestview Strategy, shows 51 per cent of respondents oppose tens of thousands of layoffs in the public service, while 36 per cent support widespread public service layoffs.

PSAC National President Sharon DeSousa told CTV News Ottawa she’s irate that so many jobs are being cut, even if that figure is lower than one she suggested could be a reality.

“Every single one of those jobs reflect public services being delivered,” DeSousa told CTV News at Six.

“These cuts will impact people who need our services more than ever. I’m really concerned about health care. I’m concerned about the benefits people rely on, employment insurance, compassionate care benefits, passports. What I’m worried about right now is they’re looking at it from a very cookie cutter corporate approach, instead of looking at it from what people need right now. And you know what? It’s jobs. And when you cut that many jobs from the federal public service, you’re impacting local economies.”

DeSousa says the budget document is dense and there are good things in it, but federal departments are interconnected and can’t be isolated easily.

“When we’re talking about the safety of Canadians, that’s great that you’re looking at CBSA and defence, but what about the Canada Food Inspection Agency? How are we going to make our food safe? As far as I’m concerned, what this government fails to see is the way those departments interconnect,” she said.

Comprehensive Public Service Review

Budget 2025 outlines $60 billion in savings over five years across the federal government through “workforce adjustments” and “restructuring operations and consolidating internal services and rightsizing programs to realize efficiencies.”

In June, the finance minister and president of the Treasury Board directed all cabinet ministers to find 7.5 per cent in savings for the 2026-27 fiscal year, beginning on April 1, 2026, followed by 10 per cent in 2027-28 and 15 per cent in 2028-29.

According to Budget 2025, the Comprehensive Expenditure Review will find $9 billion in savings for 2026-27, $10 billion in 2027-28 and $13 billion in 2028-29.

“Savings will be achieved by restructuring operations and consolidating internal services and rightsizing programs to realize efficiencies,” the budget said. “It will also involve workforce adjustments and attrition to return the size of the public service to a more sustainable level.”

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Savings across each department vary, with a two per cent target set for the Department of National Defence, the Royal Canadian Mounted Police, the Canada Border Service’s Agency, the Canadian Security Intelligence Service and the Communications Security Establishment.

Some of the departmental saving targets include $4.6 billion at Global Affairs Canada, including reductions in development funding to global health programming and revamping emergency preparedness. Further, $3 billion in savings over five years is targeted at Employment and Social Development Canada through operational efficiencies, a targeted recalibration of its programs and the use of artificial intelligence.

The Canada Revenue Agency is expected to find $1 billion in savings over five years through “modernizing government operations,” with some of the savings to be reinvested, while Canadian Heritage is required to find $366 million in savings, including reducing the Canadian Cultural Spaces Fund envelope.

According to Budget 2025, the government plans to save $25.2 billion over four years by modernizing government operations, including increasing the efficiency of back-office and administrative functions, leveraging new technology and limiting spending on discretionary travel and training.

Other government savings will be achieved through:

• $5.8 billion over four years by indexing the Disability Pension benefits to the Consumer Price Index for RCMP serving and retired members.
• $4.4 billion by adjusting Medical Cannabis Benefits for the RCMP and Veterans Affairs department to reflect market price
• $2.7 billion over four years by returning international development assistance to a pre-pandemic level
• $2.4 billion over four years by prioritizing programming to focus on housing supply
• $2.3 billion over four years by streamlining infrastructure programs.
• $2.1 billion over four years by modernizing supports for Canadian industries and workers.
• $200 million over four years by wrapping up the Tree Planting Program
• $600 million over four years streamlining government operations. Budget 2025 says Public Service and Procurement Canada has identified savings through reducing administrative requirements and delayering management.

Budget 2025 said the government will slow direct program spending growth from eight per cent to under one per cent.

New AI tool

The federal government is turning to Artificial Intelligence to enhance productivity and improve services within the public service.

A made-in-Canada AI tool will be developed by Shared Services Canada, in partnership with the Department of National Defence and the Communications Security Establishment.

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“By supporting innovative research to strengthen public services, this work will protect our digital sovereignty, keep government data and information safe in Canada, and create opportunities for the Canadian technology sector,” Budget 2025 said.

The government is also rolling out an Office of Digital Transformation to identify, implement and scale technology solutions across the government.

“It is not simply about we’re going to replace the humans with AI,” Michael Wernick, the University of Ottawa’s Jarislowsky Chair in Public Sector Management, said.

“In many cases, you can assist and augment the work of humans with video tools. So, I think that’s some of the more interesting use cases of AI.”

With files from CTV News Ottawa’s Austin Lee