Federal budget shrinks public service by 5,000 over 4 years

The federal public service is slated to shrink by 5,000 positions over the next four years, as the government fleshes out a previously announced plan to refocus spending.

Last year's budget and fall economic statement laid out plans to redirect about $15.8 billion in spending over five years to priorities including health care, with a first phase based largely on efforts to rein in travel and consulting expenses.

The 2024 budget released on Tuesday reveals that the second phase will rely on "historical rates of natural attrition" to decrease the public service by 5,000 full-time equivalent positions from the current figure of about 368,000.

Speaking to reporters before tabling the budget on Tuesday, Deputy Prime Minister Chrystia Freeland said that by reducing the size of the federal public service, the government is signalling to taxpayers that it's serious about spending their money responsibly.

"It was important, particularly right now, to say that to Canadians," she said.

The reductions are expected to apply broadly across the country, with the budget pledging they "will be implemented in a way that continues to support regional representation." There is no specific estimate for the National Capital Region.

Government taking the 'safest' approach

Sahir Khan, vice-president of the University of Ottawa's Institute of Fiscal Studies and Democracy, called an attrition-based approach a safe way to control spending especially in the run-up to an election.

"You're not really looking to reopen collective agreements, you're not looking at workforce adjustment costs," he said. "This is probably the lightest touch that you could possibly have on reducing the overall cost of government."

He said the cost of public administration has grown noticeably at the federal level.

"I think the issue now is, do you make an aggressive move to try to right-size the federal public service, or do you wait until after an election?" Sahir asked. "I think the answer is, they're taking the safest possible action they can right now, which is to leverage attrition."

That attrition is the government's primary tool for achieving $4.2 billion in savings over four years, according to the budget, which also mentions a directive for federal public service organizations to cover some "increased operating costs with existing resources."

Chris Aylward, national president of the Public Service Alliance of Canada, said the reductions don't come as a surprise,but they still raise concerns.

"You cannot do cuts to the public service without cutting some service to Canadians," Aylwardsaid.

"We'll be watching carefully to see exactly where those cuts are coming from and what impact they will have on both our members and the services Canadians rely on every day."

Ottawa Morning11:02Federal budget shrinks public service by 5,000 over 4 years

The workforce reduction will be achieved through attrition as part of plan to refocus federal spending. The Public Service Alliance of Canada's National President Chris Aylward joined us with his reaction.

More money to dump Phoenix

The budget also continues to fund the planned transition away from the beleaguered Phoenix pay system, whose deficiencies have left thousands of public servants underpaid, overpaid or unpaid since its launch in 2016.

Last year's budget set aside $52 million for Shared Services Canada and the Treasury Board Secretariat (TBS) for that work, while this year's budget commits $135 million to TBS and Public Services and Procurement Canada "to improve public service human resources and pay systems, including continuing work on a potential next generation pay solution."

The government signed a contract with Canadian company Ceridian in 2021 to test its Dayforce system, which will combine HR and payment programs.

Though the system has proven technically viable, there is still significant work ahead to migrate toward it.