Budget 2025: Federal Job Reductions Announced
As part of the spending review, the Canadian government projects the loss of approximately 16,000 federal public service jobs over the next four years. To support this transition, Ottawa is launching an early retirement incentive program. This program will allow employees aged 50 or older with over 10 years of service to retire early without penalties.
Government Savings and Workforce Reduction
The 2025 budget outlines plans to save a combined $13 billion annually by 2028-29 across various departments. A key element of these savings involves reducing the federal public service workforce by 40,000 full-time positions within the same timeframe. Nearly half of these cuts will result from internal savings initiatives.
“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.”
Public Service Employment Trends
Since the Liberal Party took office in 2015, the federal workforce has grown steadily, reaching nearly 369,000 full-time employees in 2023-24, according to the Treasury Board. Without spending reductions, the Parliamentary Budget Officer (PBO) estimates that staff costs will increase by $7 billion by 2029-30.
Early Retirement Program Details
- Eligible employees: at least 50 years old with more than 10 years of service.
- Incentive: ability to retire early without penalty.
- Goal: to reduce workforce size smoothly and save costs.
The government emphasizes modernizing and streamlining its workforce to better serve Canadians and optimize public spending.
Author’s summary: The 2025 budget aims to cut 16,000 federal jobs via early retirement incentives, part of a plan to save $13 billion annually and modernize government operations by shrinking the public service by 40,000 full-time positions.