Budget 2025: Feds project 16,000 public service job losses as part of spending review

Budget 2025: Federal Job Cuts and Spending Review

Ottawa plans to cut approximately 16,000 federal public service jobs over the next four years as part of the Liberal government’s spending review. The government aims to save a total of $13 billion annually by 2028-29 through departmental cost reductions.

Early Retirement Incentive Program

An early retirement incentive will be offered to employees aged 50 and older with more than 10 years of service, allowing them to retire without penalties.

Federal Workforce Reduction and Modernization

The federal public service will undergo a significant overhaul, targeting a reduction of 40,000 full-time positions by 2028-29. Nearly half of these cuts will come from internal government savings measures.

"We are modernizing government operations to deliver better results for Canadians and reduce costs," the budget states. "To meet the moment, we must reinvent government to be fit for the 21st century."
"This means recalibrating activities and fiscal room towards our core mandates — spending less on the day-to-day running of government."

Rising Staff Costs Without Spending Cuts

The Parliamentary Budget Officer (PBO) warns that without cuts, staff costs would increase by $7 billion by 2029-30. Since 2015, the federal workforce has grown steadily, reaching nearly 369,000 full-time workers in 2023-24, according to Treasury Board data.

Author's summary: The 2025 budget outlines significant public service reductions and modernization to save billions, while addressing rising staff costs threatening fiscal stability.

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iPolitics iPolitics — 2025-11-05

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