After a years-long jobs expansion under Justin Trudeau, there was arguably more room for cuts in 2025. (Photo by Domenico Cippitelli\/NurPhoto via Getty Images) \u00b7 NurPhoto via Getty Images <\/p>\n
Canada\u2019s federal government has made deeper job cuts in 2025 than the U.S., a development National Bank of Canada calls \u201cunintuitive\/underappreciated\u201d in light of the heavily reported efficiency efforts of the U.S. Department of Government Efficiency.<\/p>\n
Citing data from Statistics Canada and the U.S. Bureau of Labor Statistics, economist Taylor Schleich notes that as of July, Canadian federal government employment was down 3.8 per cent from the end of 2024, while the U.S. federal workforce was down 3.1 per cent as of August.<\/p>\n
Although the numbers may suggest a new austerity streak under Prime Minister Mark Carney, Schleich stresses that the contraction began earlier. \u201cBudget 2024, released by the Trudeau administration, sought to achieve fiscal savings via natural attrition in the workforce,\u201d he wrote, referring to the government headed by then-prime minister Justin Trudeau. Federal employment is down roughly five per cent since early 2024.<\/p>\n
Part of the difference also stems from Ottawa\u2019s bigger workforce footprint. After a years-long expansion under Trudeau, there was arguably more room for cuts in 2025. Even now, federal government jobs represent a larger share of Canada\u2019s workforce than in the U.S. (though the reverse was true before 2020).<\/p>\n
Furthermore, the way some U.S. federal jobs cuts are taking effect might be skewing the data. \u201cU.S. government job cuts may be understated as deferred resignations have left workers technically \u2018employed\u2019 but are really being temporarily paid not to work,\u201d Schleich said.<\/p>\n
How far Ottawa\u2019s contraction will go remains uncertain, Schleich writes, given the lack of \u201ca clear plan\u201d around employment so far. Returning to a federal workforce share near its 2015 level \u2014 about 1.75 per cent of total jobs and the lowest proportion since 2001 \u2014 would mean eliminating another 50,000 positions. That scale would echo the deep public sector cuts of the 1990s \u2014 but such a move looks improbable, Schleich argues, given large-scale initiatives such as Build Canada Homes and the Major Projects Office.<\/p>\n
More important for markets, Schleich cautions, is that the job cuts will do little to repair Ottawa\u2019s finances. Personnel expenses account for only about 13 per cent of federal spending. \u201c(Having) fewer federal workers won\u2019t be sufficient to offset the cost of a growing list of spending commitments and forgone revenues via tax cuts,\u201d he wrote.<\/p>\n
As a result, Schleich points to Ottawa\u2019s own admission that a \u201csubstantial\u201d deficit will be revealed on November 4 \u2014 a view echoed by the Parliamentary Budget Officer, which pegs the 2025\u201326 shortfall at $68.5 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"After a years-long jobs expansion under Justin Trudeau, there was arguably more room for cuts in 2025. (Photo…\n","protected":false},"author":2,"featured_media":470977,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[943,156863,6929,156864,84268,6855,156861,156865,14476,156862,49359,49,978,659],"class_list":{"0":"post-470976","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-canada","9":"tag-canadian-federal-government","10":"tag-federal-government","11":"tag-federal-jobs","12":"tag-federal-workforce","13":"tag-justin-trudeau","14":"tag-national-bank-of-canada","15":"tag-prime-minister-mark-carney","16":"tag-statistics-canada","17":"tag-taylor-schleich","18":"tag-u-s-bureau-of-labor-statistics","19":"tag-united-states","20":"tag-us","21":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115310041863224169","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/470976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=470976"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/470976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/470977"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=470976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=470976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=470976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}