Around 68,000 public servants received letters this week informing them of eligibility for potential early retirement incentives, coming as Ottawa pushes to cut 30,000 positions from the public service in the next five years.
Seeking Savings
In a letter to his cabinet colleagues sent out this past July, Finance Minister François-Philippe Champagne directed them to reduce their departments’ budgets in order to reach 7.5 percent savings starting in fiscal year 2026, rising to 10 percent savings in 2027 and 15 percent in 2028.
Champagne noted that the government would “find adjustments” as necessary to reach these goals and said that “a lot” of individuals were hired as public servants during the previous pandemic.
The total number of public servants has gone up by 100,931 in the past decade. In the past six years, the number rose from 287,983 federal public service employees in 2019 to 367,772 by last year, according to Statistics Canada. This year, the number of public servants has fallen to around 357,965.
In announcing public service sector cuts in the budget, Ottawa said it’s necessary that the public service go back to a “sustainable level.”
“The budget projects that the public service will return to a more sustainable level of 330,000 employees across government by 2028-29. This includes a planned reduction of 1,000 executive positions over the next two years to ensure adjustments also include leadership roles,” the Government of Canada noted, adding that it plans to “minimize impacts on employees” and use all methods possible to avoid involuntary layoffs as well as provide career transition services for executives.
Mohammad Kamal, director of communications for the Office of the President of the Treasury Board, said Ottawa plans to mainly rely on people leaving voluntarily from the public service or general attrition, as well as reassigning staff to still open positions where possible. He noted that legislation must still be tabled and passed in order for the incentives to be granted.
The program is expected to be put into law as early as this coming January, according to 2025 budget documents, and letters state that applications to receive the early retirement pension bonus will open either within 120 days of Jan. 15 of next year or 120 days after the law takes effect, depending which comes first.
Those who accept the offer would be required to retire within 300 days of their acceptance of the early retirement package.
Unions Critical
Sean O'Reilly, president of the Professional Institute of the Public Service of Canada (PIPSC), said that while some PIPSC members will benefit, the incentives will also “drive out” some of the public service’s best employees.“Some PIPSC members will indeed benefit from the government’s Early Retirement Incentive. We’ve already seen a noticeable uptick in questions about the program,” O'Reilly wrote in a statement sent to The Epoch Times Dec. 3.
“But let’s be clear: this program will drive out some of the most experienced people in the federal public service. Instead of retaining talent, the government is actively incentivizing its most seasoned professionals to leave.”
The Public Service Alliance of Canada (PSAC) has also criticized the looming shrinkage of the public service sector, writing in a Dec. 3 statement that the union needs complete information before responding.
“We are pressing the government to meet with us to discuss the full details of the [early retirement incentive]. Once we have this information, we will provide further advice to members,” PSAC wrote. “PSAC welcomes efforts to prevent involuntary layoffs. But any early departure program must be negotiated with the union and must honour the hard-fought contractual benefits enshrined in our collective agreements. ”
The Canadian Press contributed to this report.
