Ottawa sees highest job losses of any Ontario city amid public service cuts: analysis

The federal government is looking to shrink the size of the public service by about 30,000 jobs over several years. Photo by Jean Levac /Postmedia

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Ottawa has lost more jobs than any other large municipality in Ontario over the last 18 months as budget cuts have shrunk the size of the federal public service, according to a new analysis by the Canadian Centre for Policy Alternatives.

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Since March 2025, employment in Ottawa dropped from 705,500 to 690,700 — a loss of about 15,000 jobs, according to David Macdonald, a senior economist at the left-leaning think tank. The losses in Ottawa were greater than those in cities that are home to industries squeezed by the trade war with the United States, such as Oshawa, Hamilton and Windsor.

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“Much of that loss is actual federal public admin losses that’s driving this cratering of the job market in Ottawa,” Macdonald said.

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“So everyone’s concerned, as they should be, about some of the implications of (the) tariff war with the U.S. But in real practical terms, what the federal government has done has been much more impactful when it comes to layoffs.”

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The job numbers applied to a period when the federal government started to cut the public service. Last year, the government announced it was looking to shed about 30,000 jobs from the public service over several years.

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Canada’s budget watchdog recently released a new online tracker that showed that since its peak level of employment in the second quarter of 2024, the federal public service has shed almost 24,000 jobs.

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Pay disparity gap widening

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Macdonald’s analysis came as the Canadian Centre for Policy Alternatives released a report on Oct. 14 which revealed that pay equity gaps for women and new Canadians in the broader public sector (including provincial and municipal governments) were significantly smaller than those in the private sector.

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In Ottawa, the federal public service employs more women than men (about 57 per cent of federal public servants in the city are women), leaving them more vulnerable to public service cuts, Macdonald said.

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Women in Ottawa are paid about 3 per cent less than men in the broader public sector, according to Macdonald, who added that gap jumps to nine per cent in the city’s private sector.

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“Women are getting hit hard here, right? Like this is a major employer of women,” Macdonald said.

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“And not only are they more likely to lose their job and therefore end up getting the unemployment lines, but even if they do get a private sector job, they’re likely looking at a pay cut.”

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The report said the pay gap for women in the public sector across Canada is 4.9 per cent more than those in the private sector.

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Last year, the Canadian Centre for Policy Alternatives projected that cuts would disproportionately impact women, as well as Indigenous, disabled and racialized workers. They estimated that 59 per cent of public service cuts would affect the positions of women.

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