Canada to Shrink Civil Service, Champagne Says Ahead of Budget

18 hours ago 2

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(Bloomberg) — Finance Minister Francois Philippe-Champagne says the upcoming Canadian budget will include measures to reduce the size of the federal public service.

Financial Post

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“If you look at how many people we have today, and what we had before Covid-19, we need to get back to something more sustainable,” Champagne told reporters in Ottawa on Wednesday.

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As a result of improving processes, merging programs, using better technology, “would they be workforce adjustments? The answer is yes,” he said.

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The government will be “transparent,” “compassionate” and “smart” in reducing headcount, he added.

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Excluding military and police, Canada’s federal public service numbers 357,965 people, up 24% from 2019.

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Champagne is set to deliver a federal budget on Nov. 4, and Prime Minister Mark Carney has signaled that his government plans to deepen the deficit to improve infrastructure, housing, the military and business competitiveness.

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Economists surveyed by Bloomberg expect Canada’s fiscal shortfall to surge to C$70 billion ($50 billion), and some see the deficit rising to C$100 billion, which would be more than 3% of gross domestic product. 

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At the same time, the federal government is looking to reduce operating expenditures, and has said it wants that part of the ledger to be balanced by 2028 or 2029. 

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In July, Champagne asked members of his cabinet to find billions of dollars in savings, prompting top bureaucrats to email employees warning of cuts.

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“I’m not sugar coating it to people. Yes we had to make tough choices,” Champagne said.

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—With assistance from Mario Baker Ramirez.

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