Earlier this year, Canadian Prime Minister Mark Carney went viral after declaring the supposed end to American economic hegemony in Davos, Switzerland. The current “rupture,” Carney said, necessitated rethinking the economic relationships that “middle powers” like Canada have with stronger nations like the United States.

At home, Carney’s Liberals claim to be “Trump-proofing” the economy to protect Canadian jobs threatened by US tariffs and Donald Trump’s aggressive trade policy. At the same time, however, the minority Liberal government is engaged in the biggest attack on federal public sector workers since the devastating austerity of the 1990s.

Over the past year, thousands of “workforce adjustment” notices have been sent to federal public servants as part of the government’s plan to cut more than 40,000 positions and slash spending by 15 percent.

As one union president put it, federal public sector workers are in a pitched battle against a “DOGE experiment” in Canada.

Slashing Public Sector Capacity

The number of downsizing notifications issued to federal public servants since early last year has been dizzying. In response, the Public Service Alliance of Canada (PSAC), the largest union of federal government employees, has launched a “workforce adjustment tracker” just to keep track of all the impacted workers. So far, some 13,400 public servants have received letters notifying them that their jobs may be eliminated.

The Professional Institute of the Public Service of Canada (PIPSC), the second-largest union of federal public servants, has characterized the forecasted cuts as a “generational rollback of public services” that is producing “Hunger Games–style anxiety” among its members. With a flurry of letters reaching workers every week, the government’s plan for mass downsizing resembles death by a thousand cuts. Moreover, many of the affected jobs are vital to building the public capacity needed to protect the Canadian economy from Trump’s attacks.

In early December, two hundred members of PSAC at Natural Resources Canada received warnings that they may lose their jobs. These workers support essential research and fieldwork related to Canada’s natural environment. Cutting their jobs diminishes the federal government’s capacity to “research, monitor, and respond to climate change,” the union said. In the same week, ninety-two workers at Crown-Indigenous Relations and Northern Affairs Canada and seventy-four members at the Department of Finance also received notice of potential job losses.

During the second week of January, 1,775 PSAC members providing critical services, such as national statistics, IT infrastructure, and economic development policy work were notified that their positions could be cut. These included 730 positions at Public Services and Procurement Canada, 530 positions at Shared Services Canada, 350 positions at Statistics Canada, and 125 positions at Treasury Board of Canada Secretariat.

Then, on January 23, PSAC reported another round of deep cuts as nearly 6,000 public servants were warned of coming job losses. Affected departments in this case included: Global Affairs Canada; Transport Canada; Innovation, Science and Economic Development Canada; Health Canada; Environment and Climate Change Canada; Fisheries and Oceans Canada; and Agriculture and Agri-Food Canada.

A smaller round of workforce reduction notices was also issued to 391 workers at Public Safety Canada; 303 workers at Canadian Heritage; 206 workers at Immigration, Refugees and Citizenship Canada; 22 workers at the Administrative Tribunals Support Service of Canada; and ten workers at the Canada School of Public Service.

Undermining the Public Service

Beyond the sheer scale of the coming job losses is the direct threat to public safety and public services. Cuts at Employment and Social Development Canada and the Canada Revenue Agency (CRA) will mean longer wait times for those accessing vital income support programs, such as employment insurance for the unemployed and new parents as well as Old Age Security, child benefits, and disability supports.

Job losses among PIPSC members working for Health Canada could put public safety at risk, as systems for ensuring food, medicine, and medical device safety are weakened. At the Canadian Food Inspection Agency, 1,371 job cuts will compound several years of downsizing, with the union there underlining the potentially dire implications of an insufficient number of food inspectors.

The Canadian Association of Professional Employees (CAPE), another public sector union, denounced the plan to cut about 850 jobs at Statistics Canada, warning these workforce reductions will “have severe negative consequences for our government’s ability to make policy decisions based on quality evidence and information.”

In a press release published on January 28, PSAC warned:

Job cuts to departments like these threaten to slow service delivery, increase wait times for crucial benefits, reduce oversight and administrative capacity, disrupt critical research that informs policy making, and impact critical government operations. The impact of these cuts will be felt across the country, particularly by the more marginalized in our communities who depend on these essential services to be there when they need them.

Taken together, the government’s planned cuts amount to a full-frontal attack on workers and the public.

To make matters worse, federal public service unions are trying to bargain new contracts under these increasingly unfavorable conditions. Contracts covering more than 125,000 workers expired last October, with unions now in an increasingly tense round of bargaining.

A PSAC statement released ahead of bargaining warned the government that “members are united and mobilized heading into this round of bargaining on the heels of PSAC’s historic national strike in 2023.” In that year, public servants engaged in a largely successful nationwide strike, which generated a large amount of public support during a widely felt cost-of-living crisis.

By last November, however, the union was expressing “serious concern” that announced funding reductions would significantly impact jobs. According to the union, at that time, the government unilaterally indicated to them that it planned to pursue cost-cutting across the public sector, without any prior consultation with unions.

As the union well understands, the government’s austerity agenda has evolved considerably over the past two years. In 2022, then treasury board president Mona Fortier said the government would find $6 billion in savings through increased remote work and downsizing federal real estate. Since then, the government has imposed in-office mandates, which angered federal public servants and necessitated maintaining office space.

Last year, then-president of the treasury board, Anita Anand, promised no job losses, only to eliminate 5,000 positions through attrition. As PSAC summarized, “The government is now widening the net, looking to cut term and casual employees, and opening the door for departments to slash permanent employees through Workforce Adjustment.”

Since that time, the union has filed grievances and issued additional warnings about the impacts of job cuts and service reductions. Most recently, PSAC has formally objected to the early retirement plan being dangled in front of workers, accusing the government of bypassing the union and dealing directly with members — an unfair labor practice. As a growing number of public servants fear for their jobs, federal employers have been pushing hard for concessions while refusing to discuss the cuts hanging like a dark cloud over negotiations.

The Fight Ahead

The stage seems all but set for a bigger fight to come.

In early February, PSAC declared an impasse in bargaining with the Canada Revenue Agency, Canada’s tax collection service. Days later, the union announced similar stalemates involving other groups of federal workers and their respective employers. The various parties will now enter mediation in late April, one step closer to a possible strike.

The workforce adjustment process outlined in union contracts, while providing some important job security protections for impacted workers, also forces members to compete for a shrinking number of positions. The intra-union competition generated by austerity and job losses could be corrosive to solidarity and make member mobilization and contract bargaining that much more difficult.

If the Carney government stays the course, workers and the broader Canadian public may soon be facing cuts that rival the austerity undertaken by the Jean Chrétien government in the 1990s. The damage done then is still with us today, from underfunded postsecondary institutions to a health care system that nearly collapsed during the pandemic and has barely recovered.

Instead of building an economy of resilience to meet the challenges of the present economic “rupture,” Carney’s Liberals are supercharging austerity and slashing the capacity of the federal public service.

Federal unions will be the first in line in opposing this regressive agenda. To build a successful fightback, however, unions will need to forge alliances with broad swaths of the Canadian public to ensure that the costs of capitalist crisis aren’t imposed on workers and service users.

Workers and the broader public are indeed approaching a rupture. But it’s not the one Mark Carney had in mind at Davos.