The federal government of Canada reported a significant increase in personnel spending during the early months of the 2025-26 fiscal year, even as the number of public service positions declined. According to a report released by the parliamentary budget officer on November 19, the government spent $31.2 billion on salaries, bonuses, and other personnel-related expenses from April to August 2025. This figure represents a 7.8 percent increase compared to the same period in the previous fiscal year.

Despite this rise in spending, the average number of full-time equivalents (FTEs) in the public service decreased to 346,000, down from 358,000 in the prior fiscal year. The report indicated that the increase in personnel costs is primarily due to higher expenses per FTE rather than an increase in staffing levels.

A full-time equivalent, or FTE, is a standard measurement that equates to the working hours of a full-time employee. For instance, two or three part-time workers can be counted as one FTE.

In the previous fiscal year, 2024-25, total personnel spending reached $76.3 billion, marking a 6.1 percent increase from 2023-24. This figure exceeded earlier projections of $71.1 billion made by the parliamentary budget officer in August.

Marianne Laurin, one of the authors of the report, noted that while spending has increased, "things could change," but emphasized that costs are indeed higher than last year. Govindadeva Bernier, the director of budgetary analysis at the parliamentary budget office, expressed uncertainty about future spending trends, stating, "We don’t know yet what will happen at the end of the fiscal year."

Looking ahead, personnel costs are anticipated to decrease as the Liberal government embarks on a spending review. On November 4, the government announced plans to reduce the workforce by 16,000 FTEs by September 2025, with an overall goal of cutting approximately 30,000 jobs from the public service by 2028-29. The government aims to achieve these reductions primarily through attrition, offering early retirement incentives to encourage voluntary departures. However, some layoffs are expected as part of a workforce adjustment process designed to explore alternatives to employment within the public service.

Additionally, public sector unions are currently engaged in contract negotiations for new collective agreements, which could lead to increased salaries for public servants and further elevate expenses per FTE.