Most of the public service cuts haven't been truly strategic | Opinion

The federal government said it would take a "strategic" approach to job cuts. Photo by Jean Levac /Postmedia

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When the federal government announced a 10 per cent cut to the size of the public service in its budget last fall, it positioned the initiative as both a fiscal measure and a step to modernization.

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The public service had expanded by 40 per cent from the late 2010s to its peak in 2024. This growth was hard to justify, and a reduction from 368,000 workers to 330,000 would still leave 60,000 more federal employees than before the pandemic. But the government promised more than just saving money and trimming fat: instead of arbitrary, across the board cuts it proposed to take a “measured and strategic approach” that would presumably preserve and perhaps even update public service capacity.

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The government’s 10 per cent goal was set to be reached by 2028-29. By the end of Q2 2026, the public service had already shrunk in size by 6.2 per cent to 342,000 employees, more than halfway to the target. But while the downsizing initiative has been reasonably structured, most of the actual cuts to date have fallen short of “measured and strategic.”

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In fairness to the government, its overall plan is strategic in the sense that the cuts are expected to come mainly from areas slated for reduction under its “comprehensive expenditure review” while priority areas (such as defence) are actually growing. However, in the first year of reductions the public service mostly shed term and other temporary workers, which is a weakness when it comes to maintaining a steady flow of new talent.

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There are several ways to tackle the size of the bureaucracy. The easiest options are the least strategic and the most strategic ways are often the hardest.

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There are three options: attrition and freezes, across the board cuts, and selective cuts along with select growth, which ideally includes continuing to bring in new talent.

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What makes attrition easy is that more than 10,000 workers normally leave the public service annually, mostly through retirement. But the chances of attrition meshing neatly with the government’s operational needs are slim.

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The government isn’t relying passively on attrition alone to cut its permanent workforce, but departments have effectively used a harsh form of attrition to cull their term employee population by allowing many term contracts to expire without renewal. They do so while also largely ceasing to hire students.

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Of the 22,500 cuts to date, two-thirds were term, casual or student employees. Aside from making these workers bear the brunt of cuts, this severely curtails what has traditionally been an important source of long-term talent for the public service. Of course, as the non-permanent pool shrank, permanent jobs accounted for 90 per cent of cuts in the second year, according to Canada’s parliamentary budget officer.

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The government is being somewhat more strategic when it comes to retirements by actively incentivizing public servants to take early retirements in departments that have been slated for cuts, which is most of them. As the government appreciates, retirement incentives can be financed from the public service pension fund instead of operating budgets.