Executive summary

The newly elected federal government has promised major military spending increases and tax cuts. To pay for it, the government is seeking 15 per cent in cuts across all federal departments except the Department of Defence, the RCMP, Canada Border Services Agency, the Supreme Court and the Parliamentary Budget Office.

This analysis examines where the job losses are most likely to be concentrated. It predicts:

Across all departments: FTE losses could ramp up to a cumulative total of over 57,000 between 2024 and 2028.

The Canada Revenue Agency (CRA): This department has already lost almost 7,000 full-time jobs due to the Trudeau cuts in 2025. With the federal government’s new directive to cut, losses within the CRA could more than double to 14,277. That will impact public services: it will be harder to get help with tax issues and already long wait times will get longer.

Employment and Social Development (ESDC): This department will likely cut 2,000 full-time jobs next year, doubling by 2028 to over 4,000 full-time jobs. That will impact public services: Help with Employment Insurance and Canada Pension Plan payments to seniors could become harder to find.

Citizenship and Immigration (CIC): This department already lost 1,944 jobs in 2025 and that will likely double to a loss of 3,847 jobs, in three years’ time. CIC issues passports and helps Canadians with various citizenship and visa issues.

Cities of Ottawa and Gatineau will bear the brunt: While the service impacts will be felt across the country, almost half of the job losses will be in the National Capital Region of Ottawa and Gatineau. Those two cities could lose 24,421 full-time jobs by 2028, representing 45 per cent of all lost positions. Excluding Ottawa, the rest of Ontario could face an additional 7,812 lost full-time jobs, 14 per cent of the overall losses. Quebec, except for Gatineau, would see an additional 5,926 jobs eliminated—11per cent of the federal full-time equivalent job cuts.

It’s a stiff price to pay for major military spending and more tax cuts.

Introduction to Carney Cuts

In my previous analysis, I looked at the impact on departmental transfers of proposed Carney cuts—cuts so deep we haven’t seen anything like this since 1995. In this analysis, I look at where the job losses are most likely to be concentrated.

At this point, there are several protected departments: Department of National Defence, the RCMP, the Canada Border Services Agency, the Supreme Court and the Parliamentary Budget Office. They only need to plan for a 2% cut, but all other departments need to show how they’d accomplish a 15% cut.

As you can see from Figure 1, more than half of the “savings” will come by cutting transfers to either another level of government, non-profits or businesses or individuals. But personnel expenditures will be the biggest category cut.


Federal departmental personnel expenditure represents 28 per cent of the cuts envelope. For the departments that face the full 15 per cent cut, they’ll need to slash $6.35 billion from their personnel expenses by 2028-29.

In this analysis, I’m excluding the “protected” departments. DND got a $8.6 billion shot in the arm in June 2025, $2.1 billion of which was for recruitment, retention and support programs. “Recruitment” means more full-time equivalent positions (FTEs), although “retention and support programs” likely mean better pay and benefits—not necessarily more people. It’s unclear exactly how many more FTEs will be added in defence, nor the other protected departments. As such, they are excluded from this analysis.

Ministers have some flexibility in choosing where the cuts will hit as long as the total cut against the cuts envelope is 15 per cent. For instance, a department may propose to cut fewer than 15 per cent of their staff, but that means other budget items will have to be cut by more than 15 per cent to make up the difference. In this analysis I’m assuming all parts of the cuts envelope suffer the same 15 per cent hit.

These 15 per cent Carney cuts in addition to previous cuts introduced in budget 2023 called “refocusing government spending”. Those cuts are just now impacting staffing levels and their “savings” hit their peak impact in 2026-27. However, we can already see the impact because 10,000 jobs were lost in the federal public service in 2025.

Job cuts by department

The department by department FTEs losses from the budget 2023 cuts are already visible in staffing data. In this analysis, we’ll assume there are no further job losses from the Trudeau-era cuts, even though they won’t reach peak “savings” next year. Therefore, the job loss calculations are likely conservative.

The Carney cuts will be 7.5 per cent next year, 10 per cent the year after and 15 per cent by 2028-29. We’ll cut that proportion of FTEs each year based on the 2025-26 departmental report’s FTE counts. Those losses will be cumulative following the Trudeau cuts captured in the 2025 column of the table.

In some cases, FTE counts aren’t available for a department and so they were imputed based on average FTE personnel costs across the federal government and the personnel budget in 2025-26.

The result of these calculations is Table 1, which is sorted by the cumulative FTE losses by 2028.

In 2025, 11,610 jobs were lost in non-protected departments since the previous year. These losses weren’t the result of the Carney cuts—they were a delayed impact of the budget 2023 “refocusing government” cuts. The losses were offset by net hirings at RCMP and DND, two departments protected from the Carney cuts. From there, job losses ramp up to 57,477 by 2028.

The impact by department will differ markedly. The Canada Revenue Agency (CRA) was hit particularly hard by the Trudeau cuts in 2025: employment fell by almost 7,000 positions. Staffing makes up 83% of what’s on the line at CRA, so it will have little choice but to cut staff further as the transfers that it administers, like to seniors or the Canada child benefit, are off the chopping block. There is little the department can do to shift these cuts elsewhere. If the Carney plan proceeds, job losses within the CRA will more than double in size in the coming years.

Employment and Social Development (ESDC) is next on the chopping block for layoffs. Employment levels were basically flat in 2025, seeing little impact so far from the 2023 budget cuts. However, the Carney cuts will start to bite next year, with the loss of 2,000 FTEs and doubling by 2028 to over 4,000 FTEs.

Citizenship and Immigration (CIC) will experience the next highest number of layoffs. It has already lost 1,944 jobs in 2025, but that will double, to a loss of 3,847 jobs, in three years’ time. Personnel costs make up 21 per cent of the base eligible for cuts at CIC. Most of what’s on the chopping block at CIC is transferred to non-profits to more rapidly integrate newcomers with programs like language training. Theoretically, it could prioritize saving staffing positions, but this would be at the direct expense of transfers to non-profits. Neither of these are particularly appealing propositions.


The remainder of the large staffing losses are detailed in the table. However, these first three departments provide the most direct services to Canadians. Fewer staff means worse service in very outward facing departments. The CRA operates helplines for business and personal taxes. It is also responsible for processing taxes quickly and efficiently and fixing tax problems as they arise. They also administer most of the cash transfers to people, such as the Canada Child Benefit and Old Age Security, along with a litany of smaller transfer programs.

The ESDC administers the Employment Insurance system. If you’ve just lost your job and there is a problem receiving your EI cheque, they’re the people you look to for help. They also administer Canada Pension Plan payments to seniors. If you need to talk to someone at ESDC, there will likely be many fewer people there by 2028.

CIC issues passports and helps Canadians with various citizenship and visa issues. Staffing cuts will harm service levels.

In any department, staffing cuts means longer waits for these services, more errors and fewer people to fix those errors.

Job losses by region

Each department’s employment can also be broken down geographically. If we assume that job losses in each department are equivalent to its geographic distribution of employment, we can obtain a geographic picture of the cuts.


While the service impacts will be felt across the country, almost half of the job losses will be in the National Capital Region of Ottawa and Gatineau. Those two communities could lose 24,421 FTE positions by 2028, representing 45 per cent of all lost positions. Ontario, except for Ottawa, would face an additional 7,812 FTEs lost or 14 per cent of the overall losses. Quebec, except for Gatineau, would see an additional 5,926 jobs eliminated—11per cent of the federal FTE cuts.

Conclusion

The Trudeau-era cuts have already generated substantial layoffs, but they are only the beginning. The Carney cuts are the second axe to fall, and the pain will be deep. High quality service from a federal program will suffer. There will be fewer staff on the tax, EI and CPP call lines. Passport offices will lengthen wait times, which had been improving. Reducing staffing and service levels isn’t the right way to pay for a major military build-up and middle- and upper-income tax cuts. The trade off just isn’t worth the pain.