The federal government has announced plans to reduce the public service workforce by 40,000 jobs, a move that represents about 10% of its total headcount. This reduction was detailed in the recently released federal budget for 2025. Economists have compared these cuts to those made during the tenure of former Prime Minister Stephen Harper from 2011 to 2014.

David Macdonald, an economist with the Canadian Centre for Policy Alternatives, stated, "So these are cuts, I think, Harper could support." He estimates that approximately 15,300 of the job losses will occur in the National Capital Region. The public service workforce peaked at 368,000 employees in 2023-24, having expanded significantly under Prime Minister Justin Trudeau and during the COVID-19 pandemic. Last year, the public service already saw a reduction of about 10,000 jobs.

The budget projects that the workforce will decline to roughly 330,000 by 2028-29. The government attributes this decrease to normal attrition, including retirements and voluntary departures, as well as previous cost-saving measures. The budget states, "This reflects normal attrition through retirement, voluntary departures, and previous savings exercises, as well as further action the government is taking to slow spending and return the public service to a sustainable size."

Macdonald noted that the projected cuts align closely with the Conservative Party's platform, which proposed $44 billion in public service cuts over four years during the recent spring election. The current budget indicates $39 billion in operational spending cuts, which is about $11 billion more than what the Liberals had previously proposed. The Liberals had committed to "cap, but not cut" the public service.

The budget does not account for potential increases in personnel at the Department of National Defence, as the government ramps up spending to meet NATO commitments. The anticipated cuts will equate to around 16,000 full-time equivalents, a term that refers to the workload of one full-time employee. The government plans to achieve these reductions primarily through attrition and has introduced early retirement incentives for eligible public servants.

Public servants aged 50 and older, or 55 for certain groups, with at least 10 years of service and two years of pensionable service, will qualify for early retirement without penalties. This initiative is expected to have a fiscal impact of $1.5 billion over five years, funded through the Public Service Pension Fund.

Additionally, specific departments, including Indigenous Services Canada and the Department of National Defence, will only need to meet a 2% savings target over three years. In contrast, most other departments have been instructed to find savings of up to 15% of their operational budgets during the same period. Federal research granting councils will also be subject to the 2% savings target.

The budget did not specify which departments would face the most significant job cuts. Macdonald remarked, "You’re definitely seeing some items being named here, but in many ways, it’s still early to sort the full impact here."

To modernize government operations, the federal government aims to save $25.2 billion over four years by increasing administrative efficiencies, leveraging new technologies like artificial intelligence, and limiting discretionary spending on travel, training, and external consultants.

Michael Wernick, a former clerk of the Privy Council, expressed disappointment over the lack of significant investment in training for public servants. He highlighted concerns regarding cuts to the Public Service Commission and the Canada School of the Public Service, both facing reductions of up to 15% in their budgets. Wernick noted that the Canada School alone is facing a $10.9 million cut by 2028-29. He also raised concerns about the federal government expecting the same public service, which is being cut, to deliver on ambitious policy initiatives in areas such as housing, security, and defense.