Approved staff skip the usual 5% yearly pension cut, but deputy heads hold the final call
More than 9,000 federal public servants have applied to retire early and keep a full pension, and the window to do so closes Friday.
The Treasury Board of Canada Secretariat had received 9,141 applications for its Early Retirement Incentive Program as of July 22, CTV News reported, with 6,581 confirmed to meet the criteria and approved for early retirement, and 25 denied.
The draw for applicants is the pension.
Employees who normally leave before meeting their age and service requirements see their pension permanently reduced by five percent for each year they retire early.
The program waives that reduction, and the government said the annual pension will be calculated on total pensionable service up to the early retirement date.
Eligibility does not guarantee approval, the government cautioned on its website.
A department's deputy head reviews each application against three Treasury Board-approved criteria: the organization needs to reduce its workforce, services to Canadians will be maintained, and current and future operational needs will continue to be met.
Employees cleared for the package must stop working by January 19, 2027, with retirement taking effect no later than January 20, the Ottawa Citizen reported.
The government opened the incentive to two groups of pension plan members.
As per the federal government, the first covers members who joined on or before December 31, 2012, are at least 50 years old, and hold at least two years of pensionable service and 10 years of employment.
The second covers those who joined on or after January 1, 2013, are at least 55, and meet the same service thresholds.
The initiative traces back to Budget 2025.
The Canadian Press reported the Liberal government committed to cutting roughly 40,000 public service positions by April 2029, down from a peak of nearly 368,000 in 2024, while CTV News put the target at 28,000 positions by 2029 through attrition and early retirement.
The program has been positioned as a way to soften the impact of layoffs, and last December about 68,000 public servants received letters flagging their possible eligibility.
The government is managing workforce reductions "in line with Canada's obligations as an employer," Kamal, director of communications for Treasury Board president Shafqat Ali, told the Ottawa Citizen in a statement.
Budget 2025 proposes handling the cuts "through attrition and voluntary departures" to the greatest extent possible, he said.
The pension savings feed a broader spending squeeze.
Each approval is set to reduce a department's operating budget by 50 percent of the departing employee's salary costs, the Ottawa Citizen reported, meaning a $100,000 salary would trim $50,000 from the budget.
Dozens of approvals in a single department could push cuts into the millions.
The public service is already contracting.
Treasury Board data cited by the Canadian Press shows headcount fell by more than 12,600 over the year, from 357,965 at the end of March 2025 to 345,282 a year later, with about half of the reduction in casual, student, and term positions.
Applications for federal jobs dropped nearly 30 percent to under 735,000 between April 1, 2025 and March 31, 2026, the Canadian Press reported, while job postings fell almost 40 percent, departures rose 12 percent, and promotions declined about 52 percent.
The government has set no ceiling on uptake.
Rola Salem, a Treasury Board of Canada Secretariat spokesperson, said retirement is a personal choice and that Ottawa "does not have a specific target" for how many eligible public servants take the incentive, according to the Canadian Press.
Participation has been strong to date.
The application window opened March 26 and closes July 24.
