Based on coverage from The Star, Lethbridge News Now, Lethbridge Herald, and Medicine Hat News.
Federal departments and agencies are planning to cut more than 12,000 full-time equivalent (FTE) jobs over the next three years, according to new plans tied to the Carney government’s spending review.
The planned job cuts come as part of a broader effort to streamline government operations, a trend also reflected in the recent decision by the Canada Revenue Agency to close 45 tax drop boxes due to declining usage, as reported in our coverage of the CRA's service reductions.
The number comes from 2026-27 departmental reports that lay out how Ottawa expects to shed billions of dollars to meet cost-cutting targets. An FTE is a staffing measure, so several part-time roles can add up to one “job” in this accounting.
Ottawa spending review targets 12,000 jobs
Rola Salem, a spokesperson for the Treasury Board of Canada Secretariat, said departments were told to spell out their savings for each fiscal year through 2028-29, including how the savings would be achieved, how many FTEs would be reduced, and what measures were not included in the last budget.
Some of the biggest planned staffing cuts named in the documents include 1,793 FTEs at Public Services and Procurement Canada, 900 at Statistics Canada, and 942 at Health Canada.
Federal department cuts and program changes
A major frustration, for critics and even governance watchers, is that some departments didn’t get very specific about what will actually change for Canadians.
Several plans leaned on broad language about “streamlining” services or “modernizing” operations, while other departments said they’re still working out where savings will come from. At the same time, a handful of agencies did name concrete items on the chopping block:
- The Canadian Space Agency says it plans to terminate work on the LEAP Lunar Rover Mission. - The Canada Revenue Agency says it plans to wind down business units no longer tied to government priorities, including units that processed the Digital Services Tax and consumer carbon pricing. - The Canadian Food Inspection Agency says it will reduce “non-core research activities” and consolidate laboratory services to focus on essential testing and avoid expensive upgrades. It also plans to decommission some vehicle washing stations and wind down functions it says are no longer required for health risks linked to the trade in pets. - Environment and Climate Change Canada says it’s reducing the Low Carbon Economy Fund. - Agriculture and Agri-Food Canada says it’s winding down some programs outside its core mandate, including the Agricultural Climate Solution Living Labs program.
Canadian Armed Forces plans and property sell-offs
National Defence’s plan points to cost pressures in a very practical way: the military intends to retire selected fleets that are near the end of their service lives, are becoming too expensive to sustain, or no longer match operational requirements.
The Department of National Defence and the Canadian Armed Forces also say they will sell or lease “underutilized, obsolete or surplus” properties.
AI efficiency push across federal government services
Several departments signalled they want to lean more heavily on artificial intelligence to boost efficiency or improve service delivery. Those listed include Shared Services Canada, the Department of Justice, Public Services and Procurement Canada, and Public Safety Canada.
The documents don’t settle the obvious question Canadians will ask: whether AI tools will actually shorten wait times and reduce backlogs, or whether they’ll mainly be a way to do less with fewer people.
Parliament scrutiny, unions warn of service impacts
David McLaughlin, former president and CEO of the Institute on Governance, described the plans as “broad strokes.” He said they provide some transparency, but not enough to judge what the real-world service impact will be by region, demographic, or program area. He expects more detail to come either through additional Treasury Board or Finance documents, or through opposition questioning.
That parliamentary push is already taking shape. Treasury Board Secretary Bill Matthews told the House committee on government operations that departments were directed to target programs that are underperforming, duplicative, or not aligned with government priorities.
Former clerk of the Privy Council Michael Wernick said the departmental plans “set the table” for parliamentary review, and that MPs will press to “squeeze out more detail” at committee.
Conservative MP Stephanie Kusie, the Treasury Board critic, argued the documents don’t give a clear road map, saying they update the FTE numbers without laying out, line by line, how departments will deliver the cuts. She also raised concerns that spending is still increasing even as FTEs are set to drop, and said the lack of specifics is a transparency problem.
Federal unions are also pushing back hard. Public Service Alliance of Canada national president Sharon DeSousa called the planned reductions an “attack on the public service itself,” warning that eliminating thousands of jobs will weaken programs Canadians rely on. Committee hearings are shaping up as the next place where the government will have to show, in plain terms, what gets smaller, what disappears, and what service standards Canadians should expect.
Support Independent Canadian News Analysis
The Canada Report is supported by readers like you. If this article helped you understand what’s happening, you can support our work with a one-time tip.
Support The Canada Report
