‘Insulting wage offer’: Federal union slams 4 year, 3.5% raise proposal for public servants

A sign for the Public Service Alliance of Canada (PSAC) in Ottawa on March 25, 2025. (Peter Szperling/CTV News Ottawa)

Canada’s largest public sector union is calling the federal government’s contract offer to tens of thousands of public servants “insulting,” saying the proposal “amounts to less than one per cent per year.”

The Public Service Alliance of Canada says three bargaining units representing more than 120,000 public servants met with the Treasury Board last week as part of contract talks. The old contract expired in June 2025.

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According to PSAC, the government’s offer included a two per cent raise in 2025, followed by 0.5 per cent raises in 2026, 2027 and 2028.

“The proposal amounts to less than one per cent per year. It’s a clear pay cut at a time when the cost of living has far outpaced wages,” PSAC said.

“It also sends a clear message about how little value the employer places on the work you do every day to deliver critical public services across the country.”

In December, PSAC tabled its wage proposal to the federal government, calling for a 4.75 per cent raise each year over a three-year deal.

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In a statement on its website, PSAC said recent private-sector wage settlements “come in well above what is being offered” by the federal government, adding wage increases are 4.2 per cent this year.

The three PSAC bargaining groups in negotiations are the PA Group representing 100,000 members in Program and Administrative Services under the Treasury Board, the TC Group represents 10,000 Technical Services staff, and SV Group represents 10,000 members in Operational Services.

The contract talks come as the federal government looks to reduce the size of the federal public service by 28,000 positions by 2029. The Canada Strong Budget 2025, released in November, calls for 16,000 full-time equivalent positions eliminated through the comprehensive expenditure review, while 12,000 positions, including 350 executive positions, will be eliminated mainly through attrition and early retirement packages.

TC Group

The TC Group bargaining team declared an impasse in contract talks last Friday following two days of negotiations.

“The employer’s insulting wage proposal was the final straw for our bargaining team after the employer spending months ignoring our top issues, leaving us with no choice but to declare impasse,” PSAC said.

“There was also no movement on our proposals to improve job security, remote work, market adjustments or allowances– key issues for our members. To add insult to injury, the employer is calling for concessions that would limit access to family-related leave, personal needs leave, and roll back hours of work provisions, including overtime and standby.”

The union says declaring an impasse triggers the next step in talks, and PSAC will request conciliation.

PA Group

In February, the bargaining team for PA Group declared an impasse in contract talks. The PA Group is now in mediation with the Treasury Board, and the union says the bargaining team is “assessing next steps.”

PSAC said the PA group did see “some minor movement” in contract talks last week, but added “most of it was limited to editorial matters.”

“The fact that it took this long to receive a wage offer is a clear indication of how seriously Treasury Board is taking this process,” the union said.

“Throughout bargaining, the employer has continued to stall on key issues, including job security and remote work, while repeatedly asking for more information on proposals that have already been fully explained at the table. Instead of moving negotiations forward, they are finding new ways to slow the process down.”

The next round of contract talks between the Treasury Board and the SV Group is scheduled for June.

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