Budget 2025 Ushers a Transformational Era for Federal Public Service
Budget 2025 aims to reduce the size of the federal public service while introducing several new initiatives, including an early retirement incentive, decreased reliance on external consultants, and a Canadian-made AI tool to enhance government operations.
Workforce Reduction Plans
The budget plans to cut roughly 16,000 full-time equivalent positions over the next three years, representing about 4.5% of the current federal public service workforce. This includes up to 1,000 executive roles. By 2028-29, the federal workforce is expected to be downsized by approximately 40,000 employees compared to its 2023-24 peak.
Transformation in Work and Service Delivery
The budget describes this period as a pivotal moment for the public service to reassess its work methods, improve service delivery to Canadians, and build for future needs.
"This is a transformational time for the public service to revisit how we work, how we can improve services to Canadians and how we can build for the future."
Early Retirement Incentive Program
Budget 2025 proposes amending superannuation and tax regulations to introduce a voluntary Early Retirement Incentive (ERI) program through the Public Service Pension Plan. Eligible employees would include those aged 50 or older with at least 10 years of employment and a minimum of two years of pensionable service.
Additional Changes
- Reduced dependence on external consultants.
- Deployment of a domestically developed AI tool across federal departments.
- Focus on federal workers, particularly in the National Capital Region, where the government is the largest employer.
Author's summary: Budget 2025 marks a significant shift in federal public service, combining workforce reduction with modernization efforts like early retirement incentives and AI deployment to enhance government efficiency.