Ottawa’s Footprint Keeps Growing Despite Cutbacks

Commentary
By Matthew Lau

According to new data from the secretariat of the Treasury Board, which oversees federal government spending and operations, the federal public service headcount shrank by more than 12,000 (or about 3.5 per cent) in the past year. This reduction is consistent with the government’s aim, established by Prime Minister Carney, to reduce the public service headcount by around 30,000 by 2028/29.

After a decade of rapid bloating, the 3.5 per cent reduction is welcome news, but Canadians looking for a fiscally responsible government should hold their applause. The federal public service remains far too large, and despite the recent headcount reduction, the government’s footprint is growing in many other ways.

Indeed, since 2015 the federal public service headcount is still up 34.3 per cent, dwarfing population growth (16.5 per cent) and private-sector employment plus self-employment growth (15.0 per cent). Moreover, the recent headcount published by the Treasury Board secretariat includes active employees in the federal pay system (as of March 31, 2026) but excludes many more jobs paid for by the federal government but not technically part of the federal public service or captured in the federal pay system.

For example, Canada Post has more than 60,000 employees and the CBC has more than 7,000, but they are excluded from the secretariat’s data because Crown corporation employees are not considered part of the federal public service.

There are also many jobs that are essentially taxpayer-funded but which, in the employment statistics, are counted as private-sector jobs. Take for example a recent federal announcement of $4.2 million in new spending “to accelerate economic, business and tourism growth” in Timmins, Ontario, and surrounding areas. This spending includes a $421,820 handout to a resort to purchase and install a conveyor-style lift for skiers, snowboarders, hikers and mountain bikers.

The production and installation of this lift is a government activity, paid for by federal taxpayers. Therefore, the workers who manufacture and install this lift are—at least during the time they work on this particular project—effectively government-employed. But they are counted in the official statistics as private-sector employees or self-employed contractors.

Another example—the federal government also recently announced $159,069 to expand a farmer’s market pavilion, which includes installing new signs, completing site improvements and adding washrooms. The workers who work on this project will carry out a government-directed activity and be paid with money from government (i.e. taxpayers). But again, they will be counted in the statistics not as federal employees but as private-sector or self-employed workers.

Add it all up, and the latest fiscal forecast shows the federal government’s program spending (excluding net actuarial losses) rising from $489.9 billion in 2024/25 to $512.8 billion in 2025/26 to $536.1 billion in 2026/27. Very clearly, Ottawa’s footprint is expanding and costs to taxpayers are rising, despite the reported decline in the federal public service headcount.

While shrinking the public service by 3.5 per cent in one year is a good move, there’s much more work to be done before the federal government could be called fiscally responsible.

Matthew Lau is an Adjunct Scholar at the Fraser Institute.