The 2025 Canada Strong Budget outlines plans to reduce the federal public service by 40,000 positions by 2028–29, cutting the workforce from its 2024 peak of 367,772 to roughly 330,000. About 28,000 additional job losses are expected through a mix of layoffs, attrition, and early retirements, as Ottawa seeks $60 billion in savings over five years. An Early Retirement Incentive Program, costing $1.5 billion, will target eligible employees over 50.

The cuts are part of a Comprehensive Expenditure Review, which will trim up to 15% of departmental budgets, focusing on “rightsizing” programs and modernizing operations through AI and digital transformation. Major departments like Global Affairs Canada, Employment and Social Development Canada, and the Canada Revenue Agency face multibillion-dollar savings targets.

The job reductions are expected to heavily impact the Ottawa–Gatineau region, where roughly 14,000 federal jobs may disappear. Critics, including the Public Service Alliance of Canada, warn that cuts could strain essential services like healthcare, benefits, and food inspection, while Ottawa Mayor Mark Sutcliffe called for more clarity to ease economic uncertainty. The government argues the plan will create a leaner, more efficient, and tech-enabled public sector.

How to Protect Your Disability Benefits Before a Layoff

With news of potential layoffs across Canada, employees managing medical conditions should take time to review their workplace disability benefits.

If you’ve been struggling to keep working due to a medical condition and have disability coverage through your employer, it may be wise to consider applying for those benefits now—before any job loss occurs. Once your employment ends, you may no longer be eligible to make a claim.

To qualify for long term disability benefits, you must have a medical condition that prevents you from working and the support of your healthcare providers confirming your limitations.

This situation won’t apply to everyone, but if it could apply to you, it’s important to act sooner rather than later. Once your benefits end due to termination, it may be too late to access the protection you’re entitled to.

If you’ve been laid off, here’s what you can do next:

• Apply for Employment Insurance (EI) as soon as possible.

• Ask your employer about any severance pay or final compensation you may be entitled to.

• Explore retraining or education opportunities—many provinces are now offering new funding and support for career transitions.

• Speak with an employment lawyer. A lawyer can explain your rights and guide you through your next steps to make sure you’re receiving everything you’re entitled to.

Even if your employer says the layoffs are due to U.S. tariffs, economic slowdowns, or other external factors, you may still have a right to compensation, notice, or additional benefits.

Have you been laid off by the Federal Government in Canada? Contact our employment lawyers today. Our legal team offers a free consultation and works on a contingency basis—there are no fees unless you win your case.

Josh Pringle’s original article, “Federal government to cut another 28,000 public service jobs by 2029” was published in CTV News on November 4, 2025. Read the Full CTV News story.

We cannot assist unionized employees, and if you are a member of a union, you should speak to your union representative before consulting with a disability lawyer about your workplace issue.