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Minister of Finance and National Revenue François-Philippe Champagne speaks in the in the foyer of the House of Commons on Parliament Hill in Ottawa, on Oct. 6, 2025. The Canadian Press/Justin Tang
Finance Minister François-Philippe Champagne says the upcoming federal budget will need to include adjustments to the public service workforce to bring it back to “sustainable” levels.
“Over the last few years, the civil service has increased at a level which I think is not sustainable,” Champagne told reporters at an Oct. 30 press conference. He said the government needs to ensure the size of the public service aligns with Canada’s needs.
“We need to bring back the civil service to a sustainable level. And I think people have seen, and they will see in the budget, if you look at how many people we have today and what we had before COVID-19, we need to get back to something more sustainable.”
Champagne said the federal government will be “very transparent” and “very compassionate” with Canadians when it comes to adjustments to the public service. The budget is set to be tabled on Nov. 4.
According to Treasury Board data on federal public service employees, the total number of employees has increased by 100,931 in the last decade, but the biggest jump came over the COVID-19 pandemic years. In 2019, there were 287,983 federal public service employees, which increased by nearly 80,000 to 367,772 employees by 2024. In 2025, the number dropped by nearly 10,000 from the previous year, to 357,965 employees.
Meanwhile, the Parliamentary Budget Officer (PBO) indicated in an Aug. 28 report that federal personnel spending in the 2024-25 fiscal year increased by $1.5 billion from the previous fiscal year, despite the public service reducing its workforce.
When asked by reporters whether the Liberal government had finalized the budget yet, or if revisions were still being made, Champagne said the government “will be ready to deliver something that Canadians will be proud [of] on November 4.”
Prime Minister Mark Carney has said his government needs to “rein in” spending and “find efficiencies.” Carney has been repeating the slogan “spend less to invest more” since his campaign during the Liberal leadership race earlier this year.
During the spring election, Carney pledged to lower government spending and cap the size of the government. He also pledged to separate the federal government’s spending into operating and capital budgets, and balance the operational budget within three years.
Champagne sent a letter to his cabinet colleagues in July, asking them to find savings in their departmental budgets over the next three years. He asked them to make cuts to achieve 7.5 percent savings starting in fiscal 2026-27, increasing to 10 percent savings in 2027-28, and reaching 15 percent in 2028-29.
‘Tough Choices’
Carney told reporters on Oct. 26 that the budget will be “ambitious” and make “generational investments” in Canada. Government House Leader Steven MacKinnon has said the federal deficit will be “substantial” in the upcoming budget.
The prime minister also warned Canadians during a televised address on Oct. 22 that “there will be challenges ahead requiring sacrifice” when it comes to diversifying the economy.
When asked by reporters what those “sacrifices” might include, Champagne said Ottawa has to make “tough choices.”
“I’m not sugar coating it to people,” Champagne told reporters on Oct. 29. “Yes, we have to make tough choices, but when you make tough choices you’re able to focus, you’re able to prioritize, you’re able to invest in places that make a difference.”
Champagne has previously said Canada’s public service would need to go through “adjustments” as Ottawa looks to reduce its spending ahead of the release of its fall budget. The minister said he was “on the same page” as Carney in terms of the government’s spending review, and said the increase in government spending over the last decade is “not sustainable.”
Interim PBO Jason Jacques told the Senate committee on national finance earlier this month that he couldn’t remember a time when the prime minister has said Canada needs to engage in both “austerity” cuts and increased investment spending at the same time, while noting that combining the two would be challenging.
Opposition
Whether Carney’s government secures the support of another party on the Nov. 4 budget will decide if the minority Liberals remain in power and if a new election is called.
Conservative Leader Pierre Poilievre has requested Carney keep the federal deficit below $42 billion, which aligns closely with the target set by the government in the previous fiscal update, but far exceeds the PBO projection last month of $68.5 billion.
The Bloc Québécois has issued 18 budget demands, six of which the party listed as “unavoidable,” saying the party wouldn’t support the budget unless those demands are met.
Interim NDP Leader Don Davies has not ruled out supporting the government, but has said his party won’t support an “austerity budget,” and has expressed support for federal investments to support sectors impacted by U.S. tariffs.
While MacKinnon has said he’s worried the budget might not win enough votes to pass, and accused Poilievre of pushing for a Christmas election, Defence Minister David McGuinty said recently he has “every confidence” the Liberal government will “earn the respect and the support” of the House of Commons.
Jennifer Cowan, Noé Chartier, and The Canadian Press contributed to this report.
