PBO Warns Federal Salary Costs Soaring to $172K: Budget Cuts Ahead

Canada’s Parliamentary Budget Officer (PBO) projects that average total compensation for full‑time federal employees — including salary, benefits, pensions, etc. — will exceed CAD $172,000 by fiscal year 2029‑30. 

Here are the key figures and trends:

• In 2024‑25, federal personnel spending reached CAD $71.1 billion, already the largest component of the federal government’s operating expenditure. 

• Without any restraint exercises, PBO forecasts that personnel costs will climb to CAD $76.2 billion by 2029‑30. 

• The number of full‑time equivalent positions (FTEs) in the federal public service is projected to reach nearly 442,000 by 2029‑30. 

• Per‑employee total compensation (salary + benefits + pensions) is expected to grow, driven by wages/wages inflation plus other standard compensation. By 2029‑30, that average cost per FTE will be just over $172,000 CAD. 

In response, the government has been directed to implement savings targets:

• 7.5% cut in operational spending in fiscal year 2026‑27,

• 10% cut in 2027‑28,

• 15% cut in 2028‑29, to achieve long‑term reductions. 

Economists warn that if costs are not reined in, the burden on federal operating budget will balloon. Critics point to long wait times (e.g. CRA phone service delays up to 3.5 hours), and argue that public service “overhead” is becoming unsustainable.

Sources：Projecting Federal Personnel Expenses

Federal employees’ average total compensation to jump to $172,000: Four takeaways from the latest PBO report