Thousands of public service workers have received notices saying their jobs could be at risk as the federal government cuts its workforce.
The Public Service Alliance of Canada (PSAC), Canada’s largest union for federal public servants, said 1,775 of their members received workforce adjustment notices last week. For the second largest public service unions, the Professional Institute of the Public Service of Canada (PIPSC), 1,849 members received notices.
In its budget for the 2025-26 fiscal year, the Government of Canada announced it wanted to reduce the public service by 40,000 full-time equivalent positions by the 2028-29 fiscal year. The budget highlights that this effort is meant to reduce government spending so it can direct federal spending towards enhancing productivity and forming capital.
“This is part of the federal government’s plan to slash critical public services and cut tens of thousands of public service jobs over the next three years,” said Sharon DeSousa, PSAC national president. “When jobs are cut, programs slow down, people wait longer, and communities lose the support they rely on every day.”
The gutting of the public service has pushed workers into a “hunger games-style fight for jobs” according to Sean O’Reilly, president of PIPSC.
“They’re competing with their co-workers to keep their current job,” he said in an interview with rabble.ca. “That’s going to just absolutely kill morale.”
As departments and teams shrink, O’Reilly also highlighted that the workload for those who keep their jobs will increase. This affects the workers but also impacts the quality of service that Canadians receive.
“We could talk about a number of failures over the years of the Government of Canada,” he said. “I look at the passport office. I think Canadians are well aware of the issues that were there coming out of the pandemic. That wasn’t the fault of public servants, that was the fault of poor planning on the half behalf of the government. They basically had laid off a number of employees that do the work to review passport applications.”
Beyond the immediate impact of reducing the quality of public services, O’Reilly said he is also concerned about how cuts could lead to more reliance on private contractors.
“We’ve seen this show before,” O’Reilly said. “Basically, there’s massive cuts to the public service, and then the Government of Canada realizes that they’ve lost their expertise. So what they have to do is one of two things, they have to go and train these people to a place where they can serve Canadians, or they’re going to go to outside contractors.”
Outside contractors tend to cost the government more than hiring public servants. For IT service, for example, the Parliamentary Budget Officer found that the cost of external contractors was between 22 per cent and 25.7 per cent higher than their public sector equivalents.
“It’s really undercutting the goals of the government,” O’Reilly said. “…These are short term gains for long term pain.”
An alternate vision for balancing the federal budget
As thousands of workers face uncertainty, labour leaders are saying that this disruption could have been avoided. Bea Bruske, president of Canada’s largest labour organization the Canadian Labour Congress (CLC), said a more worker-friendly approach would have been the introduction of an excess profit tax and a wealth tax.
“There are solutions to these things, and there are ways to get more money into the coffers in order to actually be able to enhance the kinds of services that Canadians need,” Bruske said in an interview with rabble.
In its alternative budget for 2026, progressive think-tank the Canadian Centre for Policy Alternatives laid out how a tax on Canada’s richest could be used to fund the federal public service and create new projects .
“There’s an inherent unfairness, and there’s an inherent gap in economic terms between the average worker and the largest CEO,” Bruske said. “So we need to understand that we are not in a good place.”
O’Reilly said the government has really focused on the interests of executives while trying to address budget deficits.
