The recent federal budget introduced significant changes aimed at transforming the public service landscape. It plans to reduce the workforce by approximately 16,000 positions over the next three years, equating to 4.5% of the current personnel count. This reduction includes up to 1,000 executive roles. By the 2028-29 financial year, a total cut of around 40,000 jobs is anticipated from the workforce peak recorded in 2023-24.
Transformational Era for Federal Public Service
In a statement released alongside the budget, officials emphasized this as a pivotal moment for the public service. They indicated a need to “revisit how we work” to better serve Canadians and prepare for future challenges.
Key Changes Under Budget 2025
- Voluntary Early Retirement Incentive (ERI): The budget proposes adjustments to superannuation and tax regulations to offer an ERI program. Eligible employees would be those aged 50 or older with a decade of service and two years of pensionable tenure. This program will allow them to retire early without penalties and is expected to launch by January 15, 2026. The total cost is projected at $1.5 billion over five years, expected to save about $82 million annually for taxpayers.
- Reducing Consultant Expenditures: Budget 2025 aims to significantly cut spending on consultants and management services. The goal is to save approximately $25.2 billion over four years. Various departments, including Immigration and Shared Services, plan to lessen reliance on external consultants to achieve budget goals.
- Incorporating Artificial Intelligence (AI): The government will enhance its commitment to AI by establishing an Office of Digital Transformation. This initiative will involve collaborating with top Canadian AI firms to create homegrown AI tools for government use. Applications include automating IT support and streamlining routine operations within various departments.
- Collective Bargaining Adjustments: A new round of collective bargaining is set to begin this year. The budget emphasizes the importance of negotiating equitable agreements while also suggesting potential revisions to existing regulations to attract and retain talent in the public service.
Officials caution that public service salaries need to align with the current labor market trends and the government’s financial situation, hinting at possible wage constraints.
As these transformations unfold, the federal government is contemplating a shift in how it operates. Significant changes may redefine service delivery in the coming years, impacting both federal employees and Canadian citizens alike.
