1)Public service shrinks by nearly 10,000, with tax, immigration hit the hardest

Courtesy Barrie360.com and Canadian Press

By Catherine Morrison, June 13, 2025

The federal public service shed almost 10,000 people last year, with the Canada Revenue Agency and Immigration, Refugees and Citizenship Canada losing the most employees.

The last time the public service contracted was in 2015, when the number of people employed dropped just slightly from 257,138 to 257,034.

The number of public servants employed by the federal government fell from 367,772 to 357,965 over the last year.

The CRA lost 6,656 employees between 2024 and 2025, dropping from 59,155 to 52,499. The size of the Immigration, Refugees and Citizenship Canada workforce fell from 13,092 to 11,148, a loss of 1,944 employees.

The Public Health Agency of Canada lost 879 employees, Shared Services Canada dropped 608 employees, Health Canada lost 559 and the Canadian Food Inspection Agency lost 453.

Some departments and agencies saw their workforces expand over the past year. The RCMP hired another 911 public servants, Elections Canada hired another 479, National Defence hired an extra 381 and Global Affairs Canada took on another 218.

The data does not include employees on leave without pay, locals employed outside of Canada, RCMP regular force and civilian members, Canadian Armed Forces members, employees of the National Capital Commission and those who work for the Canadian Security Intelligence Service.

Most of those who lost their jobs were “term” employees — people hired for a limited period of time. Between 2024 and 2025, the public service lost almost 8,000 term employees.

The government also dropped almost 3,000 casual employees — people who can’t be employed by any one government department or agency for more than 90 days — and 1,750 students.

The number of permanent federal public service employees increased by about 2,700 last year.

More than three-quarters of the people who left the federal public service last year were under the age of 35.

Of those who lost their jobs, 4,413 were between the ages of 25 and 29, another 3,354 were between the ages of 20 and 24, 563 were aged 30 to 34 and 246 were under 20.

Lori Turnbull, a professor of political science at Dalhousie University, said it’s not surprising that most of the positions eliminated were term positions — short-term positions that don’t have to be renewed.

“These contract positions are often vehicles for entry into the public service,” Turnbull said.

David McLaughlin, executive editor of Canadian Government Executive Media and former president and CEO of the Institute on Governance, said term employees and younger staffers are the easiest people for governments to cut.

“If you’re paying people out, they don’t require big packages, so they are the easiest, cheapest employees to let go,” he said.

But by dropping younger employees whose careers are just beginning, he said, the government risks missing out on the kind of cultural change and innovation the public service badly needs.

“You run the longer-term risk by letting go younger people who may be dedicating their careers and to public service,” he said. “You are simply reinforcing the older sub-performers that may exist in the public service.

“I would not recommend this as an approach to resolving public service spending.”

The government spent $43.3 billion on public servants’ salaries in 2023-24, according to the parliamentary budget officer. It spent a $65.3 billion on all employee compensation, including pensions, overtime and bonuses.

PBO data also indicates that, in 2023, the average salary for a full-time public servant was $98,153.

The Treasury Board of Canada Secretariat said it could not provide an average salary for public servants for 2024 or 2025.

Public service employees have been braced for layoffs since the previous Liberal government launched efforts to refocus federal spending in 2023.

In the 2024 budget, ­the previous government said it expected the public service population to decline by around 5,000 full-time positions over the subsequent four years.

It also said that, starting on April 1, 2025, departments and agencies would be required to cover a portion of increased operating costs with existing resources.

Prime Minister Mark Carney has vowed to cap, not cut, the federal public service, though his government has given little indication of what that might entail. The prime minister also has promised to launch a “comprehensive” review of government spending with the aim of increasing its productivity.

Hundreds of workers in the Canada Revenue Agency, Employment and Social Development Canada and Immigration, Refugees and Citizenship Canada have been laid off recently.

Those organizations also saw their numbers increase during the pandemic years.

Turnbull said that, with the pandemic over and immigration numbers being scaled down, the federal government sees this downsizing as “logical.”

McLaughlin, meanwhile, warned that downsizing only offers “episodic savings” and wondered whether service delivery can keep up with demand.

2) Ottawa moves to prop up youth employment in a rough summer jobs market

Courtesy Barrie360.com and Canadian Press

By Craig Lord, June 11, 2025.

The federal government is moving to shore up a historically weak summer job market for students — even as one economist argues tough employment prospects for young people suggest broader softness in the job market.

Statistics Canada shone a light on the difficult employment prospects for students heading back to school this fall in its May jobs report last Friday.

Roughly one in five returning students aged 15 to 24 was unemployed in May, the agency said. The last time the jobless rate for students was this high outside the pandemic was in May 2009.

Also on Friday, the federal government announced an expansion of the Canada Summer Jobs program, which offers wage subsidies to businesses hiring young people for seasonal work.

Ottawa says it plans to subsidize an additional 6,000 jobs on top of the 70,000 already planned for employers participating in the annual program.

Employment and Social Development Canada, which runs the Canada Summer Jobs program, will pay for the extra positions with $25 million in reallocated internal funding.

Jobs Minister Patty Hajdu said in a media statement that the higher target is meant “to address the urgent needs youth are experiencing in the job market.”

StatCan said the jobless rate for returning students has trended up annually each May since 2022, when just over 10 per cent of returning students were unemployed in a relatively tight labour market.

Brendon Bernard, senior economist at the online jobs board Indeed, said the summer labour market is “pretty weak right now.”

“But the weakness is wrapped up in broader economic trends,” he said.

“Targeted youth policies are only going to be dealing with one of the symptoms of the problem, where there are other aspects of the labour market that … we need to get in better shape for the situation to really improve.”

Canada’s broader unemployment rate also has been rising in recent years, ticking up to seven per cent in May.

A major disruption in the labour market tied to Canada’s trade war with the United States could be denying young people early work experience, Bernard said.

He pointed to recent job losses in sectors like manufacturing as a particular problem for border towns that rely heavily on trade between Canada and the United States.

Younger Canadians who had hoped to break into the manufacturing sector in those regions are now seeing opportunities dry up, Bernard said, and they’re likely being pushed to other opportunities outside their field — crowding the job market for all youth this summer.

The national vacancy rate — the share of jobs left unfilled compared to all available positions in Canada — stands at three per cent, according to the latest available data from March.

Such a low vacancy rate suggests reduced hiring demand among businesses, or indicates that they’re having little to no trouble filling jobs.

Employer demand for the Summer Jobs Program is lower this year than in previous years, data provided by ESDC shows.

The department received 44,821 requests from businesses for funding to support 225,766 jobs during the application period late last year. That’s roughly 2,000 fewer applications and almost 9,000 fewer jobs than in each of the previous two years.

Bernard said youth unemployment is higher today than in 2019 — the last time Canada’s vacancy rate was roughly this low.

That suggests there’s more slack building up in the younger end of the labour pool, he said.

“Something has hit the youth labour market differently than the labour market for older workers,” Bernard said.

One explanation could be recent population growth trends that saw a surge in mostly younger workers entering Canada over the past few years, he said.

But Bernard also said a lack of mobility among older Canadian workers is creating a “traffic jam” in the labour market.

“Another potential factor that has impacted youth employment recently is just how slow job-switching has been,” he said.

The rate of job changes in May was 0.46 per cent, Bernard said — a third lower than it was in 2019.

In a strong job market, Bernard said, you would normally see workers changing jobs and moving up the career ladder, leaving entry-level positions to younger workers who need the experience.

He said that government efforts to support the youth workforce are likely to fall short because the plight of younger job-seekers is tied to broader conditions in the labour market.

Hajdu acknowledged in her statement that governments “can’t do it alone.”

“Programs like this open the door, but it’s employers, community leaders and organizations who help young people walk through it,” she said.

3) Why youth unemployment is Canada’s warning sign

Courtesy of Barrie Daily

Leave a Comment / By Penny Wise

Sarah Chung stands at her convocation, degree in hand, but the celebration feels muted by uncertainty. Canada’s newest graduates are entering a workforce that’s less welcoming than at any time since the 1990s, and the numbers don’t lie—the country faces its highest youth unemployment rate in a quarter-century, pandemic years aside.

The Canadian labour market, once buoyed by rapid post-pandemic hiring, has lost its momentum. As inflation outpaced wage growth and population gains outstripped available jobs, the promise of abundant opportunity quickly faded. Young adults now confront a tangled web of economic stressors, from rising interest rates to the ever-present threat of recession, all while the U.S. trade war continues to cast a long shadow over economic stability.

Statistics Canada’s first quarter data paints a sobering picture: people aged 15 to 24 are experiencing joblessness levels not seen since the mid-90s. There’s also a surge in the NEET rate—youth neither working nor in school—a metric that flags those struggling to get a foothold. Meanwhile, an influx of temporary foreign workers, especially in food and retail, has made competition fiercer, complicating young Canadians’ efforts to launch their careers.

What makes this crisis unique is its multifaceted origin. Economic recovery whiplash, aggressive immigration policies, and a burst of automation have left entry-level positions scarce. Older workers, pressed by affordability issues, are holding onto jobs or taking on second ones, narrowing the window for Gen Z further. According to Tricia Williams of the Future Skills Centre, youth unemployment is a “canary in the coal mine,” warning of broader turbulence ahead.

But the consequences aren’t limited to today’s paycheque. Economist Miles Corak warns that “scarring”—the diminished long-term prospects stemming from early-career unemployment—is a genuine risk. When opportunities stagnate, graduates may slide into roles below their skill level, dragging down lifetime earnings and ambition.

These headwinds should set off alarm bells for policymakers and businesses alike. If Canada’s future workforce is left idle now, the aftershocks could echo across decades in lost potential and innovation. Real solutions demand urgency and imagination—because the country’s economic health depends on more than just numbers; it rests on the aspirations of its youngest workers.

References:
Gen Z is facing the worst youth unemployment rate in decades. Here is how it’s different

4) Five things to know about Canada’s plan to meet the NATO defence spending target

Courtesy Barrie360.com and Canadian Press

By Canadian Press Staff

Prime Minister Mark Carney is promising that Canada will quickly boost its defence spending to hit the NATO member target of two per cent of national GDP this year.

Canada has long promised to meet the target but has never had a detailed plan to get there. The announcement comes as NATO allies prepare for talks on raising the spending target to five per cent at the annual summit this month.

Here’s what you need to know about the announcement.

1. What is the NATO spending target?

All NATO allies, Canada included, committed to spending the equivalent of two per cent of their GDP on defence in 2006.

In 2014, NATO leaders agreed formally that countries that were not meeting the target must move toward it within a decade.

After Russia launched its full-scale invasion of Ukraine in 2022, allies agreed at the 2023 NATO summit to make two per cent the minimum spending target.

Many European countries have rapidly scaled up their defence spending in response to Russia’s war on Ukraine. As of this year, 22 of the 32 NATO member states are spending at least two per cent of their national GDP on defence. Canada is not among them.

A leaked Pentagon document obtained by The Washington Post in 2023 quoted then-prime minister Justin Trudeau telling NATO officials that Canada would not meet the two per cent target.

Under pressure from allies, the Trudeau government later promised to hit the two per cent benchmark by 2032.

In January, then-defence minister Bill Blair told reporters he was trying to speed up that timeline to 2027.

2. Why is the target changing?

At this year’s NATO leaders’ summit in The Hague, allies will discuss a proposal to boost the spending target to five per cent of GDP.

That’s expected to be broken down into two parts — 3.5 per cent for what NATO calls core defence spending and another 1.5 per cent for a broader category of defence and security-related spending.

NATO Secretary-General Mark Rutte told reporters last week there was “broad support” among allies for the change and that he had total confidence they would agree to it at the summit, which is being held June 24-26.

The change is seen as a response to U.S. President Donald Trump’s demands for allies to pull more weight in NATO. Among NATO members, the U.S. spends the most on its military in dollar terms.

In March, Trump suggested America might not defend its allies if they don’t meet the target. “If they don’t pay, I’m not going to defend them,” he said.

According to NATO’s most recent figures, U.S. defence spending was estimated at 3.19 per cent of GDP in 2024, down from 3.68 per cent a decade ago. It’s the only NATO ally whose defence spending has dropped since 2014.

3. How much is Canada spending on defence?

According to the latest NATO projections, Canada was on track to spend 1.45 per cent of GDP on defence in 2024-25.

NATO allies also have agreed that 20 per cent of their spending should go toward equipment. In 2024, Canada was on track to spend 17.8 per cent of its total on equipment, making it one of only three countries to miss both parts of the target.

Carney’s announcement on Monday amounts to another $9.3 billion in spending in this fiscal year, 2025-26.

Senior government officials told reporters at a briefing Monday morning that the country’s defence spending for the fiscal year was projected to be $53.4 billion.

With the announcement of this new spending, that sum is expected to rise to $62.7 billion for 2025-26 — or two per cent of Canada’s national GDP, which is estimated at just over $3.1 trillion this year.

While most of that — $53.4 billion — is Department of National Defence spending, about $14 billion is going to other government departments, including $370 million for the Communications Security Establishment.

4. What is the money being spent on?

A large amount of the spending announced on Monday — $2.63 billion — is meant to “empower the military to recruit and retain the personnel needed to carry out its mandate,” said a Government of Canada press release.

The government says that funding will help accelerate military recruitment and expand the civilian defence workforce. It includes a pay raise for members.

The Canadian Armed Forces is short more than 13,000 personnel in its regular and reserve forces.

In February, Chief of the Defence Staff Gen. Jennie Carignan said the Armed Forces was on track to meet its recruitment goal of enrolling 6,496 members this fiscal year. The military said it was aiming to reach its approved strength of 71,500 regular forces members and 30,000 reserve members by April 2029.

Another $2.1 billion is set aside to diversify Canada’s defence partnerships and help build the domestic defence industry.

Carney has said Canada wants to join ReArm Europe, an 800 billion-euro plan to beef up the defence of EU countries. Government officials said Monday that $2.1 billion could help Canada enter joint procurements or multilateral initiatives with other countries.

5. What is happening with the Coast Guard? 

The government is planning to include $2.5 billion it spends on the Canadian Coast Guard in its NATO spending this year — about 60 per cent of the agency’s total budget.

The Coast Guard will remain part of the Department of Fisheries and Oceans.

It’s responsible for ensuring the safety of people in Canadian waters, carrying out search-and-rescue operations and conducting research, and has a fleet of icebreakers. The Coast Guard also has a mandate to “ensure Canada’s sovereignty and security by establishing a strong federal presence in our waters,” according to the Government of Canada.

Government officials said there is no plan to arm the Coast Guard or its members. They say its inclusion in Canada’s overall defence and security strategy reflects its role in providing what they call maritime domain awareness.

The intent, officials told reporters, is to improve inter-service communication, particularly in the Arctic region. The increased co-operation could involve sending military members on Coast Guard trips, for example.

The government said it’s boosting the Coast Guard budget by $100 million.

— With files from Kyle Duggan and The Associated Press

6) (Updated) Carney vows Canada will meet 2% NATO spending pledge this year

Courtesy Barrie360.com and Canadian Press

By Kyle Duggan, June 9, 2025

Canada will finally meet its NATO defence spending commitment this year as it confronts an alarming new world of threats, Prime Minister Mark Carney said in Toronto Monday morning.

Carney said Canada will rapidly advance its military spending timeline to hit the NATO target of two per cent of national GDP by adding $9 billion in spending to the fiscal framework this year.

“Canada will achieve NATO’s two per cent target this year, half a decade ahead of schedule,” the prime minister said, adding he plans to accelerate that timeline again within the next few years.

Carney said Canada depends too much on an increasingly unreliable United States for its defence. He said his government will look to partner more with European allies as it moves to build up Canada’s domestic industrial base.

“The United States is beginning to monetize its hegemony, charging for access to its markets and reducing its relative contribution to our collective security,” he warned, adding that U.S. world dominance is coming to an end.

The federal government currently is spending about 1.45 per cent of real GDP on defence and has not hit the two per cent target since 1990 — despite having promised its biggest allies for years that it would.

Canada has come under intense pressure from allies lately to swiftly increase its military budget to levels not seen since the Cold War.

Monday’s announcement comes just ahead of a major NATO meeting in the Netherlands set for later this month. Allied nations are expected to adopt a plan at that meeting to hike the NATO member spending target to five per cent of national GDP — a level Canada has not reached since the 1950s.

Not long ago, Carney was promising only to meet the two per cent target by the end of the decade.

Carney promised during the recent election campaign to move up Canada’s deadline for meeting the target by at least two years, to 2030.

Carney said Monday his government will design a new defence policy and industrial strategy to lift up the defence sector. He said that work will make use of Canadian steel and aluminum — industries currently under threat from U.S. President Donald Trump’s tariff war.

Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, said this moment has been a long time coming.

“It’s a historic day for our country,” she said. “We’re going to take (Carney) at his word.”

Cianfarani said that for Carney’s plan to work, a risk-averse federal bureaucracy will have to learn how to accelerate defence spending.

“The second piece of that comment is really, will the machinery of the government underneath the prime minister be able to go from flash to bang and make this happen? And that is a real risk,” she said. “They will need to dig deep. There will need to be very creative solutions.”

The Department of National Defence has long struggled to spend all the money budgeted for it. Carney said the new funds being injected into the department are very “spendable” and added that his government is working to reform defence procurement.

The new defence spending plan includes $2.6 billion for recruiting and retaining members of the Canadian Armed Forces, $1 billion for boosting military capabilities, $2.1 billion for a new defence industrial strategy and $2 billion to diversify Canada’s defence relationships beyond the U.S.

In his speech, Carney cited planned purchases of new fighter jets, submarines, drones — all items he spoke about during the recent election campaign. Although background documents given to journalists Monday referred to boosting military capabilities, the Department of National Defence offered no new details.

Carney vowed that “none” of the new spending announced Monday would be “creative accounting” meant to impress NATO members and said he won’t have to raise taxes to pay for any of it.

Carney also said he will “expand the reach, security mandate and abilities of the Canadian Coast Guard and integrate it into our NATO defence capabilities to better secure our sovereignty.”

Senior officials said in a background briefing that while the Coast Guard will be folded into defence, there are no plans to arm Coast Guard personnel.

Carney also announced a plan to set up a new defence research bureau, to be called BOREALIS, which he said would “advance cutting-edge research in artificial intelligence, quantum computing, and other frontier technologies.”

It all amounts to a sharp shift in defence policy from a prime minister who only took on the job in March.

In 2023, a leaked Pentagon document obtained by The Washington Post said then-prime minister Justin Trudeau had told NATO officials that Canada would never meet the two per cent target.

Under pressure from allies, the Trudeau government later promised to hit the two per cent benchmark by 2032.

In January, then-defence minister Bill Blair told reporters he was trying to speed up that timeline to 2027.

About a month later, he was in closed-door meetings with top industry leaders discussing how they could work together to meet the two per cent target.

Documents obtained by The Canadian Press through access to information law show that in February and March, Blair and two other cabinet ministers met with heads of major defence industry players as his department worked on drafting a new defence industrial strategy — work that started last fall.

They convened five roundtables with the CEOs of major defence contractors across the aerospace, shipbuilding, land systems and electronics sectors.

“We are currently looking at options to accelerate our defence investments to the amount of two per cent of our GDP in the next two years,” said one of the talking points written for Blair.

“How can we enable industry to respond to this accelerated timeline? 

7) Justice Department cutting up to 264 jobs as it faces ‘budgetary pressures’

Courtesy Barrie360.com and Canadian Press

By Catherine Morrison, June 6, 2025

The federal Department of Justice is set to lay off as many as 264 employees as it navigates what it calls “significant budgetary pressures.”

Ian McLeod, a spokesperson for the department, said in an email the department is taking “difficult but necessary” steps to manage available resources, given ongoing budget pressures that “can no longer be sustained.”

He said 264 positions in the department “may no longer be required” and that the employees in those roles were notified this week.

McLeod said the department has implemented measures aimed at addressing budgetary pressures over the past year, including staffing restrictions.

He said the department also underwent a “thorough examination of its organizational structures” and identified opportunities for cost savings.

McLeod said the affected positions were chosen based on “functions and work that may not continue,” given the department’s reduced budget.

He said it’s unlikely that all 264 positions will be eliminated.

The number of federal public service jobs dropped by almost 10,000 in the past year, marking the first decrease since 2015.

As of March 31, there were 357,965 people working for the federal government, down from 367,772 in 2024.

Between 2024 and 2025, the Justice Department lost 29 workers, going from 5,637 to 5,608 employees.

Hundreds of workers in other federal organizations — like the Canada Revenue Agency, Employment and Social Development Canada and Immigration, Refugees and Citizenship Canada — have also been laid off recently.

Prime Minister Mark Carney has promised to cap, not cut, the federal public service, but has not said what that cap would be.

He has also promised to launch a “comprehensive” review of government spending with the aim of increasing its productivity.

McLeod said the Justice Department will keep taking “proactive measures,” like staffing restrictions, careful prioritization of work and streamlining of functions across the department “to minimize further impacts on staff as much as possible.”