Ottawa signals major federal workforce reductions ahead

(Image courtesy of CBC)

As part of Canada’s plan to reduce the size of the civil service by 40,000, outlined in the 2026 budget, the federal government has told 23,000 employees that their jobs could be at risk.

According to a report from the federal government, in December 2025 and January 2026, there were around 22,200 employees and 900 executives given letters of “affected or at-risk status” regarding their positions. This does not mean that these jobs are going to be immediately cut, but rather notifying the worker that their job is under review and may be eliminated. For example, in the finance department, the government is planning to cut 79 employees, but 82 employees received affected or at-risk letters.

Employment and Social Development Canada going under the knife

Looking at the positions to be reduced, Employment and Social Development Canada is seeing the largest decrease in cuts. This makes sense, given that it is the largest department out of the ones listed by total population. It is followed by Health Canada and Public Services and Procurement Canada.

Information retrieved by the federal government.

According to data from 2022, the federal government spent $37 billion on salaries, with an average of $90,578 per full-time employee. The government currently plans to cut about 16,400 positions, which would be an estimated cost savings of $1.5 billion dollars.

However, the government still has a long way to go before it reaches its 40,000 reduction goal.