Ottawa is moving from talk to cuts. Finance Minister François‑Philippe Champagne says the fall budget will shrink the federal public service, and he has already told ministers to find savings across operations.
As of March 31, 2025, the public service had already fallen to 357,965 people, down about 9,800 from a year earlier. That is the first drop in a decade, and it shows the squeeze started before budget day. The planned budget date is November 4, and the government is selling it as austerity plus investment. In a minority Parliament, the votes to pass it are not automatic.
The Money Cut Is Now Timed
Champagne asked every minister for plans to cut day to day spending by up to 15 percent over three years. The ramp runs 7.5 percent in 2026 to 27, 10 percent in 2027 to 28, and 15 percent in 2028 to 2029. That sets the glide path for fewer staff and fewer contracts, even if they call it attrition. Because those plans are in, the Treasury Board can lock them into next spring’s estimates.
This stacks on the earlier refocusing plan that trims consulting, travel, and operations by C$15.8 billion by 2027, then C$4.8 billion every year after. Cuts to external services usually hit first, then internal jobs follow as departments try to protect programs. Since the prior savings are already booked, the next round has to land on headcount to make the math.
The Treasury Board holds the knife. It can freeze hiring, claw back operating votes, and force departments to live within lower reference levels. That power sits in the Estimates process and the Financial Administration Act. With those tools, the centre can make attrition real by not backfilling.
Unions can slow this, but not stop it. The Public Service Alliance of Canada calls the plan “lazy, reckless and short‑sighted,” and warns layoffs are already hitting programs. They can push back in the media and at the table, but the calendar is on the government’s side until new contracts open. Because the budget vote decides where the money flows, the real veto sits with opposition parties next week.
Where The Pain Lands First
Contractors and term staff pay first, then regional program teams as vacancies stay vacant. The government’s own binder says attrition should cut roughly 5,000 jobs over four years, and departures average 15,000 a year, so capping the workforce means fewer backfills and slower service. That is going to land hard on call centres and permit shops.
Champagne’s line is blunt: “adjustments” are coming and a “leaner and more efficient government” is the goal. The subtext is control. If services slip, the centre will blame old systems and push tech, not add staff. Because service delays create political heat, the next round will shift from blanket freezes to targeted program cuts.
The Prime Minister wants an autumn budget that cuts operating spend and still funds housing and defence. Markets will watch the deficit track, and unions will watch notices. Because the vote is due the week of November 4, the bargaining power sits with swing MPs who can force softer headcount language in exchange for support. After that, the Treasury Board runs the tap.
