Will Public Service Cuts in Ottawa Be Catastrophic?

Many Ottawa residents are understandably wondering how the public service cuts proposed in the 2025 federal budget will affect the city. Nearly half of all federal employees work in the Ottawa–Gatineau region.

The Conference Board of Canada predicts the loss of about 16,000 federal jobs in the capital over the coming years, plus another 6,000 private-sector jobs affected indirectly. In total, this represents roughly 2.5% of the local workforce.

Experts stress, however, that this is not a return to the austerity of the 1990s, when the Chrétien government eliminated 55,000 positions. Even after the cuts, the federal workforce will remain 10% larger than it was before the pandemic.

Many reductions will occur naturally, as 10,000–14,000 employees retire or leave each year. According to former Parliamentary Budget Officer Kevin Page, a large share of the targeted 40,000 cuts by 2029 can be achieved through attrition alone.

Risks remain — particularly for younger workers if fewer new vacancies open. But Ottawa also has growth areas: the tech sector, the Department of National Defence, AI modernization initiatives, and the expansion of NRC’s photonics centre.

Economists expect slower growth, but not decline. Ottawa has weathered similar cycles — in the 1990s, under Stephen Harper, and during the pandemic. The city will feel the cuts, but it won’t be a catastrophe.