Federal Workforce Could Shrink by Almost 60,000 Jobs Due to Spending Cuts: Report

Spending cuts from the federal government could add up to more than 57,000 full-time job losses between 2024 to 2028, a new report says.

The hardest hit areas will be the Canada Revenue Agency (CRA), Citizenship and Immigration Canada (CIC), and Employment and Social Development Canada (ESDC), according to the report from the Canadian Centre for Policy Alternatives (CCPA).

A total of 11,610 jobs were lost this year in non-protected departments since 2024—cuts that are attributed to former Prime Minister Justin Trudeau’s administration rather than the current government headed by Prime Minister Mark Carney.

“These losses weren’t the result of the Carney cuts—they were a delayed impact of the budget 2023 ‘refocusing government’ cuts,” noted the July 24 report, which is authored by CCPA senior economist David Macdonald.

“The Trudeau-era cuts have already generated substantial layoffs, but they are only the beginning. The Carney cuts are the second axe to fall, and the pain will be deep.”

The Carney government is implementing a 15 percent spending cut to the operating budgets of many federal departments to help meet defence spending increases and fund tax cuts, excluding the Department of National Defence, RCMP, the Canada Border Services Agency (CBSA), Supreme Court, and Parliamentary Budget Office (PBO). According to MacDonald’s analysis, passport processing time and immigration services along with impacts to Employment Insurance and Canada Pension Plan are likely to be experienced as a result of the cuts.

The CRA has experienced roughly 7,000 job losses so far this year, which Macdonald projects will rise to 14,277 jobs lost and lead to longer delays in the CRA responding to requests for support as well as a bigger burden on tax services.

“Reducing staff in these departments will almost certainly increase delays, errors, and public frustration,” MacDonald writes.

The CIC, meanwhile, will be faced with a choice of whether to lay off employees or cut funding to non-profits that support immigrants, Macdonald said.

“More than half of the ‘savings’ will come by cutting transfers to either another level of government, non-profits or businesses or individuals. But personnel expenditures will be the biggest category cut,” MacDonald noted.

The report said nearly half of the projected job losses will occur in the National Capital Region of Ottawa-Gatineau, amounting to an estimated 24,421 positions. Ontario is also projected to lose 7,812 jobs, and the rest of Quebec apart from Gatineau to lose 5,926 jobs. The report projects that the rest of the provinces and territories will account for only 13 percent of lost jobs as a result of the government cuts.

“The Carney cuts will be phased in gradually—starting at 7.5 per cent in 2026, increasing to 10 per cent in 2027, and reaching 15 per cent by 2028–29,” the report says. “In 2025 alone, departments not shielded from cuts saw a net loss of 11,610 jobs—driven by prior reductions, not the new fiscal plan. These early losses were partially offset by new hires in Defence and the RCMP.”

The upcoming cuts are the deepest fiscal reductions since the 1990s, according to the report.