Federal Hiring Fell 40% Last Year: What Job Seekers and Public Servants Need to Know Now

What This Means for You

Federal public service data released this week confirms what many job seekers and public servants have suspected for months: the era of easy federal hiring is over, at least for now. New hires into the federal public service fell from 40,790 to 28,564 in a single year — a 40% drop — while promotions were cut roughly in half, from 23,000 to 11,230. Based on our review of the underlying workforce reduction plan, this is not a temporary dip; it is the visible surface of a multi-year plan to shrink the federal public service by roughly 40,000 positions from its 2023-24 peak of about 368,000. What you should do next depends heavily on which side of this shift you're on.

If You're Applying to the Federal Public Service

Immediate reality check:

Applications to the public service fell by roughly 30% year over year, from just over 1 million to 733,040 — but that decline in applicant volume hasn't kept pace with the much steeper 40% drop in actual hires, meaning competition per posting has effectively increased, not decreased, even though fewer people are applying overall.
Prioritize internal-facing and operational roles over policy and communications positions. Expenditure reviews across government have historically protected front-line service delivery (benefits processing, border services, correctional services, healthcare for veterans) more than head-office policy and corporate services functions, which tend to absorb cuts first.
Build a relationship with a specific department's HR or hiring manager rather than relying solely on the general jobs.gc.ca portal. With fewer postings, informal networks and casual/term opportunities that convert to indeterminate positions are becoming a more common entry path than they were two years ago.

What to prepare:

Have your Public Service Employment Act eligibility documents (proof of citizenship or permanent residence, language test results if applicable) ready before you apply, since slower processing means fewer chances to fix an incomplete application before a competition closes.
If you're a student or recent graduate, look specifically at the Federal Student Work Experience Program (FSWEP) and the Post-Secondary Recruitment (PSR) program — these dedicated streams have generally been shielded from the broader hiring slowdown because they feed the entry-level pipeline the public service still needs.
Budget for a longer job search than you might have a few years ago. With fewer postings and more competition, expect the process from application to offer to take several months longer than during the high-hiring years of 2022-2024.

If You're a Current Federal Employee Not Yet Affected

Protect your position:

Confirm whether your specific role sits within a program area that has been named in your department's expenditure review submissions. Ask your manager directly whether your team has been asked to identify reduction targets — departments are required to have done this work even if individual notices haven't gone out yet.
Document your accomplishments and workload now, before any workforce adjustment process begins. If your position is later declared surplus, having a clear record of your contributions strengthens your case for a "guarantee of a reasonable job offer" placement elsewhere in government.
If promotion is part of your career plan, understand that with promotions down roughly 50%, competitive processes for advancement are both rarer and more contested. Consider lateral moves into program areas identified as growth or protection priorities (cybersecurity, fraud prevention, front-line benefits delivery) rather than waiting for a promotion in a shrinking unit.

If You've Received a Workforce Adjustment Notice

Know your options under the Workforce Adjustment Directive:

Guarantee of a Reasonable Job Offer (GRJO): If your position is declared surplus and you're an indeterminate employee, you are generally entitled to a reasonable job offer within the public service, and departments must make genuine efforts to place you before you can be laid off. Confirm your GRJO status in writing with your HR advisor — do not rely on verbal assurances.
The "Options" period: If no reasonable offer materializes, you typically have three formal choices: a 12-month paid surplus priority period during which you actively job-search within government with priority status ahead of external candidates; a lump-sum transition support payment calculated by years of service; or an education allowance (up to a set maximum) potentially combined with up to two years of leave without pay to retrain.
Get the numbers before you decide. The transition support payment and education allowance amounts are calculated differently and the right choice depends heavily on your age, years of service, and how close you are to pension eligibility. Before choosing, request a written pension estimate from the Government of Canada Pension Centre — an early retirement window inside a workforce adjustment can meaningfully change what a transition payment is worth to you versus staying in the surplus priority pool.
Union support: If you're represented by PSAC, PIPSC, or another bargaining agent, contact your local before signing anything. Unions have been actively grieving elements of the government's early retirement incentive program, and your specific circumstances may be affected by an active grievance or negotiated adjustment.

For All Canadians: Why a Smaller Federal Workforce Affects You

Even outside the public service, a 40,000-position reduction touches service delivery Canadians rely on directly — processing times for passports, EI claims, immigration applications, and tax filings have historically lengthened during past federal downsizing periods (notably during the 2012-2015 Deficit Reduction Action Plan). If you're waiting on a federal application or benefit right now, budget extra time and use online status-tracking tools rather than calling in, since call-centre capacity is also affected by these reductions.

The News: What Happened

According to data reported by The Hill Times on July 16, 2026, the "inflow" of new federal civil servant hires slowed to 28,564 in the 2025-26 fiscal year, compared to 40,790 the year before — a 40% decline. The same data showed 11,230 federal employees received promotions last year, down from 23,000, while job applications to the public service fell to 733,040 from just over 1 million.

As reported by BNN Bloomberg earlier this year, the federal government's broader plan calls for cutting approximately 15,000 federal public service jobs over three years as part of the Canada Strong Budget 2025 expenditure review. According to the Public Service Alliance of Canada (PSAC), more than 26,000 public servants have received notices that their jobs are at risk since the reduction process began, with the government's overall target described as shrinking the workforce by about 40,000 positions from a 2023-24 peak of roughly 368,000.

Treasury Board President Shafqat Ali has said the government is still finalizing details of its workforce adjustment and return-to-office plans, and that letters about a planned early retirement program have been sent to almost 68,000 public servants who may be eligible, according to reporting on his recent public comments. The government has said it is trying to boost the rate of voluntary attrition to reduce the need for involuntary layoffs.

According to PSAC's public statements, the union has filed a policy grievance over the early retirement incentive program with the Federal Public Sector Labour Relations and Employment Board, and continues to call on the government to reverse the cuts or find alternative cost-reduction measures that don't put jobs and services at risk.

Analysis: Why This Matters

Based on our analysis, the hiring and promotion data released this week is best understood as a lagging indicator of decisions made months ago in the Canada Strong Budget 2025 expenditure review — the review is now visibly working its way through the system via slower hiring, fewer promotions, and workforce adjustment notices, rather than through a single dramatic layoff event.

The scale is significant by historical standards. The federal public service grew substantially between 2015 and 2023, roughly doubling the pace of population growth over that period. A reduction of 40,000 positions would bring the workforce back toward levels last seen around 2019-2020, reversing several years of expansion in a compressed timeframe — a pace of contraction not seen federally since the 2012-2015 Deficit Reduction Action Plan under a previous government.

The attrition-first strategy has real trade-offs. By leaning on natural attrition, voluntary departures, and early retirement incentives rather than immediate layoffs, the government is trying to minimize forced job losses — but this approach also means the workforce shrinks unevenly, since attrition happens fastest among employees close to retirement rather than according to any deliberate plan about which skills or functions the public service needs most going forward.

Historical Context

Canada's last comparable federal downsizing, the 2012-2015 Deficit Reduction Action Plan, cut roughly 19,200 positions and was associated with documented service-delivery slowdowns, including longer wait times for Employment Insurance processing and passport services that became a recurring public complaint through 2015 and 2016. The current reduction target is more than double that scale.

What Happens Next

In our analysis, expect three developments over the next six to twelve months: a continued rise in workforce adjustment notices as departments finalize expenditure review submissions through the rest of 2026; growing pressure on service-delivery timelines in high-volume programs like passports, EI, and immigration processing, which Canadians should plan around; and continued union grievances and possible labour actions if the government does not reach negotiated terms on the early retirement incentive program, following the pattern already set by PSAC's policy grievance.

Your Action Plan

Immediate (This Week)

If job-hunting federally, check jobs.gc.ca directly rather than relying only on job boards, and consider FSWEP or PSR streams if you're a student or recent graduate
If currently employed, ask your manager whether your program area has submitted expenditure review reduction targets
If you've received a workforce adjustment notice, confirm your Guarantee of a Reasonable Job Offer status in writing with HR

Short-term (This Month)

If facing a surplus decision, request a written pension estimate from the Government of Canada Pension Centre before choosing between the 12-month priority period, transition payment, or education allowance
Contact your union local (PSAC, PIPSC, or applicable bargaining agent) if you have questions about the early retirement incentive program or your rights under the Workforce Adjustment Directive
If waiting on a federal service (passport, EI, immigration application), check processing times online and build in extra time

Long-term (This Year)

If pursuing federal employment, build direct relationships with hiring managers in departments less exposed to cuts, such as front-line service delivery
If remaining in the public service, document your work contributions regularly in case your position is later affected
Monitor Treasury Board and Public Service Commission announcements for updates on the pace and scope of the reduction plan through 2029

Other Perspectives

Government Position:

Treasury Board President Shafqat Ali has indicated the government is prioritizing voluntary attrition and early retirement incentives over forced layoffs, and has said final details of the workforce adjustment and return-to-office plans are still being worked out, according to reporting on his public comments.

Union Position:

PSAC has publicly called on the government to reverse what it describes as reckless cuts and to work with public sector unions on alternative cost-reduction approaches that don't put jobs and services at risk, and has filed a formal grievance over the early retirement incentive program's structure.

Public Policy Analysts:

Commentary reported by The Hill Times has included calls from public policy experts for ministerial offices and the Prime Minister's Office to share proportionally in workforce reductions, rather than concentrating cuts in the operational public service.

Affected Workers:

Federal employees who have received workforce adjustment notices face genuine uncertainty about job security, retirement timing, and career continuity, particularly those not yet close to standard retirement age who may not benefit as much from the early retirement incentive structure.

Note: Including multiple perspectives doesn't imply all views are equally valid, but ensures readers can make informed judgments.

Corrections Policy

We strive for accuracy. If you find an error in this analysis, please email us at [email protected]. We will promptly investigate and correct any factual inaccuracies.

Updates:

No corrections to date (as of July 17, 2026)

Sources

The Hill Times — New hires to public service drop 40 per cent last year, as promotions halved
BNN Bloomberg — Here's where 15,000 federal public service jobs will be cut over 3 years
Public Service Alliance of Canada — PSAC demands reversal of escalating federal cuts after 8,000 workers targeted for job loss
Canadian HR Reporter — Ottawa begins phased cuts to federal workforce under multi-year expenditure review
Business in Vancouver — Treasury Board minister silent on details of plan to shrink federal public service
The Hill Times — 'Everyone should feel the hit': ministerial offices and PMO should be cut, too, say some leading public policy experts