Analysis: portrait of the new federal government workforce and where hires still happen

The Canadian federal government is currently undergoing its most significant workforce contraction in a generation. Driven by the Comprehensive Expenditure Review and the directives of Budget 2025, the administration is executing a targeted reduction aimed at realizing $60 billion in savings by 2029. This fiscal mandate involves reversing the rapid public sector expansion of the early 2020s, transitioning the total federal workforce from a peak of nearly 368,000 employees in the 2023-2024 fiscal year down to a target baseline of 330,000. Achieving this net reduction of nearly 40,000 personnel requires a multifaceted approach involving natural attrition, voluntary retirement incentives, and formal workforce adjustment notices that are rippling across the core public administration.

As these broad targets are translated into departmental action plans, the sheer scale of the restructuring has become apparent. The federal government has committed to shedding at least 16,000 full-time equivalent positions directly through expenditure review cuts over a three-year period, alongside an overarching reduction of 1,000 executive roles.

Departmental Impacts and Documented Estimates

The distribution of these workforce reductions is far from uniform. Different branches of the federal government have been assigned varying savings targets, with most core departments tasked with finding up to 15 percent in operational savings. The resulting job losses are heavily concentrated in specific agencies, fundamentally altering the capacity of several critical state functions.
Statistics Canada has been profoundly impacted by this initiative. The agency is mandated to cut 850 positions over the next two years, including 12 percent of its executive ranks. To achieve this, the department has issued over 3,200 workforce adjustment notices—letters informing indeterminate employees that their services may no longer be required. Similarly, the Canada Revenue Agency is undertaking a massive reduction, planning to decrease its workforce from over 51,400 positions in the 2026-2027 fiscal year down to roughly 48,800 by 2028-2029. The tax agency is achieving this by winding down specific business units that are no longer aligned with immediate government priorities, such as those processing the consumer carbon pricing program and the digital services tax.

Other major departments are facing equally steep declines. Employment and Social Development Canada is projected to shed several thousand full-time equivalent positions by 2028. Public Services and Procurement Canada is targeting the elimination of nearly 1,800 positions. Global Affairs Canada expects a reduction of 1,240 full-time roles, having already issued over 1,100 affected notices to its staff. Health Canada is slated to lose 942 positions, while Environment and Climate Change Canada will see its headcount drop by over 800 positions by the end of the decade. The agricultural sector is also affected, with Agriculture and Agri-Food Canada reducing its workforce by 665 positions as it discontinues non-core research programs like the Agricultural Climate Solution Living Labs.

It is crucial to understand that receiving a workforce adjustment notice does not guarantee an immediate layoff. The federal framework mandates that departments attempt to provide affected indeterminate employees with a reasonable job offer elsewhere within the public service. When that is not feasible, opting employees are granted choices that include transition support measures, education allowances, or a priority entitlement to seek alternate public sector employment.

The Status of Temporary and Term Employees

While indeterminate employees navigate the complex workforce adjustment process, temporary and term workers within the federal government are facing immediate and acute job insecurity. The reliance on temporary staff, which surged during the pandemic response, is being systematically dismantled as departments scramble to meet their cost-cutting targets without triggering massive layoffs among permanent staff.

Recent union data indicates that over 5,500 federal term employees have had their contracts terminated early or simply left unrenewed as funding envelopes expire. Because temporary and term workers do not possess the sweeping job security protections or priority placement rights afforded to indeterminate staff, they are typically the first to be released during periods of fiscal restraint. Departments are actively allowing temporary roles to expire as a form of natural attrition, ensuring that the financial burden of the workforce reduction is largely absorbed by the most precarious segment of the public service labor pool.