Budget 2025: Federal Job Cuts and Spending Review
Ottawa plans to reduce the federal workforce by about 16,000 public service positions over the next four years as part of the Liberal government's spending review. To ease this transition, an early retirement incentive program will be introduced. It will allow employees aged 50 or older with at least 10 years of service to retire early without penalties.
Planned Savings and Workforce Reduction
The government's budget, released Tuesday, outlines departmental strategies to save a total of $13 billion annually by 2028-29. As part of these measures, the federal public service will be overhauled, reducing approximately 40,000 full-time positions during this period. Nearly half of these job 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.”
Federal Workforce Growth and Cost Projections
Since 2015, the federal workforce has grown steadily, reaching nearly 369,000 full-time employees in 2023-24, according to the Treasury Board. Without spending cuts, the Parliamentary Budget Officer estimates staff costs could increase by $7 billion by 2029-30.
Early Retirement Program Details
- Eligibility: Employees aged 50+ with over 10 years of service
- Benefit: Early retirement without penalties
These changes are designed to modernize government function and improve fiscal responsibility while focusing resources on essential mandates.
Author's summary: The 2025 federal budget aims to cut 16,000 jobs and save $13 billion yearly by 2028-29 through workforce reductions and modernization, supported by early retirement incentives.