The federal government plans to cut 40,000 public service jobs (10%) by the end of fiscal year 2028-29, abandoning its election promise of attrition-only cuts. This move aims to slow government operational spending growth from 8% to under 1% and boost program efficiency, partly through expanded AI use.

The budget aims to cut public sector workers to 330,000 by 2028-29 — a reduction of 16,000 full-time positions — from a 2023-24 peak of 368,000, to achieve a "more sustainable level."

Go Ad Free

The plan includes cutting 1,000 executive positions over two years and reducing spending on management and consulting services by 20% over three years. As of March, the federal public service had 9,340 executives.

Bureaucracy booms, Canadians struggle under decade of Liberal rule: Franco Terrazzano

On Friday's episode of The @EzraLevant Show, Franco Terrazzano (@franco_nomics) of the Canadian Taxpayers Federation (CTF) discussed how the number of jobs in the federal government has… pic.twitter.com/vbbQg3xle6

— Rebel News (@RebelNewsOnline) June 2, 2025

Finance Minister François-Philippe Champagne stated in his budget speech that a more efficient government needs a streamlined public service, as reported by the Canadian Press.

"Since 2019, the federal public service population has grown at a rate far greater than the Canadian population," he said. "We must get the size of our public service back to a sustainable level that is in keeping with best practices."

While some reductions will occur through attrition, some positions will be cut. The government reduced the public service by almost 10,000 employees last year, progressing towards its goal.

Recent job cuts include roles at the Canada Revenue Agency, Employment and Social Development, and Immigration, Refugees and Citizenship Canada.

Prime Minister Mark Carney pledged during the April election to "cap, not cut" the public service and boost productivity. However, his finance minister later mandated cabinet to find departmental cuts totaling $25 billion (15%) by 2028/29, nearly double the Liberal Party's initial campaign promise.

The government plans to streamline operations using technology, including AI, by launching an Office of Digital Transformation to implement tech solutions across federal departments, fulfilling a Liberal election promise.

Shared Services Canada, with National Defence and Communications Security Establishment, will create a Canadian-made AI tool for federal use.

Canadian Labour Congress president Bea Bruske stated that the projected 40,000 public service job cuts by 2029 exceed those made during the Harper era. 

The federal public service cut 10,000 jobs last year, yet executive positions increased by 185. Public sector unions advocate for investing in front-line services over expanding senior management and reducing spending on bonuses.

Trudeau’s fat bureaucracy: 42% more executives, $1.95 billion in bonuses

In 2024, there are now 9,155 federal bureaucrats classified as executives, compared to 6,414 in 2016.

MORE by @SheilaGunnReid: https://t.co/Ir67POd7FT

— Rebel News (@RebelNewsOnline) October 18, 2024

A 2025 Leger poll for the Canadian Taxpayers Federation (CTF) shows 66% of Canadians want to cut federal bureaucracy, believing its growth hasn't improved services, with 50% noting a decline since 2016.

From 2016 to 2023, the federal government increased its workforce by 98,986 employees, reaching a total of 357,965 federal bureaucrats. During this period, the cost to taxpayers surged 77%, from $40.2 billion to $71.2 billion, yet federal departments consistently met less than 50% of annual performance targets.

“It’s clear that adding more bureaucrats does not mean better services,” said Franco Terrazzano, CTF Federal Director. The average annual compensation for full-time bureaucrats, including pay, pension, and other benefits, is $125,300.

A two-year, $15 million initiative starting in January aims to reduce federal bureaucracy by allowing early retirement (at age 50) without pension penalties. Government organizations will communicate these measures to employees and bargaining agents soon.