Pension-funded buyout targets 40,000 federal jobs amid surge in $150k-plus salaries
More than 27,000 federal public servants now earn at least $150,000 a year, even as Ottawa moves to cut tens of thousands of jobs and roll out an early retirement program funded from the public service pension plan, according to documents tabled in Parliament and recent budget details.
According to the Treasury Board of Canada Secretariat, more than 20,000 employees received total compensation between $150,000 and $199,999 in 2024-25, The Canadian Press reported.
Nearly 5,000 employees were in the $200,000 to $249,999 range, almost 1,400 were between $250,000 and $299,999, 654 were between $300,000 and $399,999, 42 were between $400,000 and $499,999, and six received $500,000 or more.
The document says compensation includes salaries, bonuses, benefits and overtime pay. It covers permanent, term, casual and student workers.
It excludes the RCMP, the Canadian Forces and certain agencies such as the Canadian Security Intelligence Service and the National Capital Commission, which are not counted as part of the federal public service or lack comparable data.
That same document shows the number of public servants paid at least $150,000 has grown quickly: around 21,200 in 2023-24, about 14,250 in 2022-23, roughly 12,300 in 2021-22 and about 13,800 in 2020-21.
Treasury Board data show the federal public service totalled 357,965 employees as of March 31, compared with a peak of 368,000 positions in 2023-24.
Against that backdrop, the federal government plans to cut about 40,000 public service jobs by 2029 from that peak, with roughly 10,000 positions already eliminated over the past year, according to The Canadian Press.
The latest budget says Ottawa intends to have about 10 percent fewer federal employees by 2029 and 1,000 fewer executive positions over the next two years, while lowering program spending and administration costs by about $60bn over five years.
To avoid deeper layoffs and “protect the jobs of younger people,” Ottawa is preparing a one-year voluntary early retirement program that would allow some employees to retire early with an immediate, unreduced pension, according to CBC News.
The proposal would let employees as young as 50, with at least 10 years of employment and at least two years of pensionable service, apply to retire with an immediate pension based on years of service and no penalty for leaving early.
The federal government estimates the program will cost $1.5bn over five years, with about half that expense next year, and expects it to save about $82m a year, largely from pension contributions.
The budget says the program would be funded from the Public Service Pension Fund.
As per The Canadian Press, the government is in the process of sending letters with details of the early retirement option to roughly 68,000 public servants who may be eligible.
A digital copy of the letter, shared with The Canadian Press, says public servants “are not required to take action at this time” and notes the program will be available only to certain employees under parameters set by the Treasury Board.
The letter says those parameters “would be designed to maintain essential services and business continuity,” and warns that “acceptance of an employee’s application to participate would not be guaranteed.”
The budget says Ottawa intends to implement the one-year program as early as January 15, 2026, though legislation is still required, according to CBC News.
The letter says the application window would fall within 120 days of January 15, 2026, or 120 days from the date the legislation comes into force, whichever is later, and that employees whose applications are accepted would be required to retire within 300 days, as reported by The Canadian Press.
Unions are urging members to proceed cautiously.
Public Service Alliance of Canada national president Sharon DeSousa told reporters last month she does not expect many members to sign up for the early retirement incentive “given the high cost of living,” according to CBC News.
In a later statement, she said the government has not shared full details and warned that taking the incentive could mean giving 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 said.
DeSousa said PSAC supports efforts to prevent layoffs but argues any early departure program “must be negotiated with the union, because no one should be pressured into giving up hard-fought rights.”
She added that “any involuntary layoff falls under our collective agreement, and we will enforce those protections,” as reported by The Canadian Press.
Nathan Prier, president of the Canadian Association of Professional Employees, criticized using pension funds to finance the program.
He said younger workers will bear about half the cost of the program through their pension contributions and argued that the government is treating civil servants’ money as its own, which he described as “borderline theft.”
Prier said the union is not against a voluntary departure program but wants action taken after “consultation and thoughtful process.”
Richmond Hill South Conservative MP Vincent Ho submitted the order paper question that prompted the compensation disclosure.
He argued the number of federal public servants making more than $250,000 a year has surged and said “Canadians can’t afford the cost of Carney and this Liberal government.”
Franco Terrazzano, federal director of the Canadian Taxpayers Federation, said Prime Minister Mark Carney “must take air out of Ottawa’s ballooning bureaucracy to fix the federal finances.”
He argued that “Carney needs to make the government more affordable for taxpayers and he should start by reining in the pay and perks for these top bureaucrats,” adding that “taxpayers can’t afford to keep bankrolling a bloated government full of overpaid paper pushers.”
