# Canadian Federal Government Reduces Workforce

Canada's federal government has reduced its public service workforce by over 23,000 employees in the past two years, representing a 6.5% decrease aligned with Budget 2025 commitments to cut public service size by 10% by 2028-29. Between Q2 2025 and Q2 2026 alone, nearly 9,505 positions were eliminated, with approximately 90% of these cuts affecting permanent roles. Key departments such as Employment and Social Development Canada and Public Services and Procurement Canada experienced significant reductions, while National Defence and the Canadian Space Agency increased staffing levels. The government has implemented early retirement incentives and is managing a phased return-to-office policy amid workspace constraints.

- **Why this matters:** Procurement professionals should anticipate potential impacts on contract management, service delivery, and vendor engagement due to workforce reductions in major departments.
- Departments with staffing cuts may adjust procurement priorities or reduce contract volumes, while those with increased staffing like National Defence may expand procurement needs.
- Early retirement programs and workforce restructuring could affect continuity and knowledge transfer in procurement offices, requiring adaptive strategies.
- Organizations providing services to federal agencies should evaluate how these staffing changes influence contract opportunities and engagement timelines.

**Jurisdictions:** federal
**Industries:** Professional Services
**Topics:** Policy
**Published:** September 16, 2026

### Government Entities
- Office of the Parliamentary Budget Officer
- National Defence
- Communications Security Establishment
- Elections Canada
- Housing, Infrastructure and Communities Canada

### Key Quotes
> Parliamentarians need reliable and readily available information in order to review changes in government employment levels in order to question ministers about what that means for public services to Canadians.
> — Annette Ryan, Parliamentary Budget Officer

### Sources
- [Federal public service has lost 23,000 staffers in two years: budget watchdog | CHAT News Today](https://chatnewstoday.ca/2026/09/15/federal-public-service-has-lost-23000-staffers-in-two-years-budget-watchdog-report) - CHAT News Today
- [Public service: 90% of federal job cuts were permanent positions](https://www.ctvnews.ca/ottawa/article/permanent-jobs-account-for-most-job-cuts-in-federal-public-service-budget-watchdog) - CTV News