Budget 2025: Federal Job Losses and Spending Review
Ottawa plans to introduce an early retirement incentive program aimed at federal employees aged 50 and older with over 10 years of service, allowing them to retire early without penalty.
Approximately 16,000 federal public servants are expected to lose their jobs over the next four years as part of the Liberal government’s spending review.
Government Savings and Workforce Reduction
The budget released on Tuesday includes departmental plans to save a total of $13 billion annually by 2028-29. A significant change involves a 40,000-person reduction in full-time federal public service positions within the same period.
“We are modernizing government operations to deliver better results for Canadians and reduce costs.”
“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.”
Federal Budget Office's (PBO) Projection
The Parliamentary Budget Officer warns that without spending cuts, staff costs could increase by $7 billion by 2029-30.
Since 2015, the federal workforce has steadily grown, reaching nearly 369,000 full-time employees in 2023-24, according to the Treasury Board.
Summary
The 2025 budget aims to reduce federal public service costs through early retirements and job cuts, modernizing government operations while responding to rising personnel expenses.
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