Federal Public Service Transformation in Budget 2025
Budget 2025 aims to reduce the size of the federal public service by about 16,000 full-time equivalents over the next three years, representing roughly 4.5% of the current workforce. Among these cuts, up to 1,000 will be executive positions. By 2028-29, the government forecasts a total reduction of approximately 40,000 workers compared to the 2023-24 peak in public service employment.
Key Changes for Public Servants
Many federal employees, especially those in the National Capital Region where the government is the largest employer, will experience significant changes. The budget describes the period as “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 to amend superannuation and tax regulations to introduce a voluntary early retirement incentive (ERI) program via the Public Service Pension Plan. Employees aged 50 or older, with at least 10 years of employment and two years of pensionable service, would be eligible to participate.
Other Initiatives
- Reduction in reliance on external consultants.
- Development and deployment of a made-in-Canada AI tool across government departments.
"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."
The proposed changes indicate a strategic push to modernize the federal public service while managing workforce size and service efficiency.