Ottawa Notifies 68,000 Federal Workers of Early Retirement Incentive to Cut 40,000 Jobs

Federal government sends early retirement information to nearly 70,000 public servants as part of job reduction efforts.

OTTAWA — The federal government is currently distributing letters containing information on its planned early retirement program to nearly 70,000 employees as it moves to reduce the size of the public service.

Mohammad Kamal, director of communications for the Office of the President of the Treasury Board, confirmed that letters are being sent to roughly 68,000 public servants who may be eligible for the voluntary program.

Ottawa aims to cut approximately 40,000 public service positions from a peak of 368,000 recorded in 2023-24. About 10,000 jobs were already eliminated over the past year.

The government intends to boost the rate of attrition and avoid layoffs, especially among younger workers, by offering a voluntary scheme allowing eligible workers to retire early without incurring a pension penalty.

Program Details and Uncertainties

A digital copy of the letter, shared with The Canadian Press, stated that public servants are not required to take immediate action. It also clarified that the program will only be available to specific employees who apply to participate under parameters established by the Treasury Board.

The letter noted: “These parameters would be designed to maintain essential services and business continuity. As such, acceptance of an employee’s application to participate would not be guaranteed.”

The budget indicated the one-year early retirement program could be implemented as early as January, though Kamal acknowledged that necessary legislation is still required to advance the plan.

The application window will open within 120 days of January 15, 2026, or 120 days from the date the legislation comes into force, whichever date is later. Successful applicants would be mandated to retire within 300 days of acceptance.

Kamal did not confirm whether departments and agencies would announce any job cuts before gauging employee interest, only stating that workforce reductions will be managed through attrition and voluntary departures to the greatest extent possible.

Union Pushback: Bypassing Rights and Using Pension Funds

Sharon DeSousa, national president of the Public Service Alliance of Canada (PSAC), expressed skepticism last month that many members would sign up for the incentive, citing the high cost of living.

In a recent statement, DeSousa criticized the government for withholding the full details of the program. She argued that accepting the early retirement incentive could force workers to give up a lump-sum payment based on years of service.

“That’s real money owed to workers under the collective agreement that this government seems to be trying to bypass,” she stated.

DeSousa stressed that the union supports efforts to prevent involuntary layoffs but urged members to consult union representatives before deciding. She insisted that any early departure program “must be negotiated with the union, because no one should be pressured into giving up hard-fought rights.”

Nathan Prier, president of the Canadian Association of Professional Employees (CAPE), raised financial concerns regarding the plan’s funding source—the Public Service Pension Fund.

“It’s all well and good to protect the jobs of younger people, but they are the ones who, throughout their careers, will pay half the cost of the program through their contributions to the pension plan,” Prier argued. “In the same vein, the government is using civil servants’ money as if it were its own, which sounds like borderline theft.”