The Canadian federal government just announced a pretty ambitious plan to reduce its public service workforce by 25%. They plan to cut approximately 40,000 positions from their high-water mark of 368,000 in the current 2023-24 fiscal year. The company has to date eliminated over 10,000 jobs. This new initiative, along with program priorities and other administration efficiencies, is intended to cut program spending and overall department administration costs by about $60 billion over the next five years.
To accomplish this, the federal government is taking a targeted approach to executive level cuts. Their plans call for eliminating 1,000 of these positions during the next two years. Secondly, there’s a three-year, 20 percent cut in outlays for for-profit companies providing management and consulting services. The Feds plan to introduce an early retirement program for qualified public servants, beginning no later than January 2026.
Letters were sent to almost 68,000 affected public servants notifying them that the early retirement effort was in effect. If true, that means a majority of employees will soon be hedging their bets. This decision, which has already drawn the ire of unions and workers, marks a seismic shift in the federal workforce. Since the federal budget was released this past November, 2,273 members of the Public Service Alliance of Canada have already received layoff notices. Of these, more than 1,900 work at Statistics Canada.
In recent weeks, the union has shown its resolve to save jobs and these services in the wake of these cuts. They’re demanding that the government account for why experienced bureaucrats are being targeted for cuts. Concurrent to this, we’ve seen spending on outsourcing reach record heights. Government documents obtained through Access to Information show that Canada spent over $19 billion in non-governmental professional and special services in the 2024-25 fiscal year. That’s an increase of almost $2 billion over last year and up about $8.5 billion since 2020.
Immigration, Refugees and Citizenship, Environment and Climate Change and Employment and Social Development—in total, more than a dozen federal departments— informed their employees late last year of imminent layoffs. They indicated they would report back with an update on the situation this month. Unfortunately, this has created a culture that has many employees frightened for their lives.
Sean O’Reilly, president of the Professional Institute of the Public Service of Canada, noted the ongoing challenges faced by public servants.
“We are hearing directly from members that consultants are still working alongside employees who received layoff notices this week.” – Sean O’Reilly
The effect of these layoffs goes far beyond losing one’s job. It can endanger the mental health of public servants. DeSousa, a national representative from the Public Service Alliance of Canada, underscored this point in a recent statement.
“It’s impacted our members, their mental health; they don’t know if they’re going to be next.” – DeSousa
A recent study of employees revealed job security as their top concern. It should alarm all Canadians who value public services. DeSousa emphasized this concern.
“It’s also a scary time for those who reside in Canada because if you’re dependent on those services, you don’t know how you’re going to be affected, and that’s not fair.” – DeSousa
Our new administration is deeply committed to cutting spending, consolidating operations and improving efficiency. Consequently, further job destruction is guaranteed in the weeks ahead. The recent announcements have sparked discussions about the future of public service in Canada and its reliance on external consultants amidst increasing operational costs.
