Canada Cuts 23,000 Federal Employees Amid Spending Review

The Canadian federal public service has reduced its workforce by more than 23,000 employees over the last two years, according to data released by the Office of the Parliamentary Budget Officer. As of the second quarter of 2026, federal employment fell to 344,970, representing a 6.5 percent decrease. These reductions are part of a comprehensive expenditure review by the Carney government to save $60 billion over five years and a Budget 2025 commitment to shrink the public service by 10 percent by 2028-29.

Annette Ryan, the Parliamentary Budget Officer, launched an online tracker on September 15, 2026, to provide parliamentarians with granular data on these cuts. The tool reveals a shift in strategy: while previous cuts targeted casual and term employees, permanent positions accounted for approximately 90 percent of job losses over the past year. Employment and Social Development Canada saw the largest reduction with 3,221 workers cut, while other significant losses occurred at the Canada Revenue Agency, Health Canada, and the Public Health Agency of Canada. Conversely, the Department of National Defence and the Canadian Space Agency increased their staff.

To support these goals, the Treasury Board of Canada implemented an early retirement program that has approved over 9,400 applications. Simultaneously, the government is enforcing a return-to-office mandate requiring staff to be on-site four days a week. However, Public Services and Procurement Canada reports that approximately 10 percent of employees cannot yet return due to insufficient office space.