Public Service Cuts Spark 'Hunger Games' Anxiety and Outsourcing Outcry

OTTAWA, ON – January 16, 2026 – An atmosphere of what one union leader is calling a “Hunger Games-style fight for jobs” has descended upon Canada’s federal public service. As waves of workforce reduction notices hit thousands of government employees, a growing chorus of criticism is questioning the government's strategy, especially as spending on expensive external consultants continues to reach staggering heights.

This afternoon, federal scientists and researchers marched from the Delta Hotel to Parliament Hill, protesting the deep cuts they argue threaten the very foundation of public services. The demonstration is the latest flashpoint in a tense standoff between the government and its workforce. The Professional Institute of the Public Service of Canada (PIPSC), which represents over 85,000 professionals, is demanding an explanation for the apparent contradiction at the heart of the government's austerity measures.

“This week saw major waves of workforce cuts at Shared Services Canada and Statistics Canada, dealing a serious blow to Canada's digital and information infrastructure,” said Sean O'Reilly, President of PIPSC, in a statement. “We are hearing directly from members that consultants are still working alongside employees who received layoff notices this week. That raises serious questions.”

The Government's Drive for Savings

The current workforce reductions are a core component of the federal government’s Comprehensive Expenditure Review (CER), a broad initiative designed to refocus spending and achieve long-term fiscal balance. Budget 2025 outlined a plan to eliminate 28,000 public service positions over four years, part of a larger goal to shrink the federal workforce by approximately 40,000 jobs from its peak of 367,772 employees in March 2024.

The government's stated objective is to bring the public service back to what Finance Minister François-Philippe Champagne has described as a more “sustainable” level. The plan relies on a mix of layoffs, attrition through retirement, and early retirement incentives to reach a target of roughly 330,000 employees by the 2028-29 fiscal year. This follows a previous commitment in the 2023 budget to refocus $14.1 billion in government spending over five years.

However, unions argue this approach is fiscally shortsighted and ignores a crucial part of the spending equation.

The Paradox of Pricey Consultants

While public servants face job insecurity, federal contracts with external consulting firms continue to flow, creating what critics call a “shadow public service” that is both more expensive and less accountable.

PIPSC contends that this reliance on outsourcing is a colossal waste of taxpayer money. “Consultants cost at least 26 percent more than public servants,” O’Reilly stated. “If you are trying to save money, you do not lay off trained, experienced workers and pay someone else more to do the same job. That's not savings. That's waste.”

Public spending data appears to support the union's concerns. Despite a stated goal to reduce outsourcing, the government awarded contracts worth over $220 million to the “Big Four” consulting firms—Deloitte, PwC, KPMG, and Ernst & Young—in 2024 alone. Deloitte was the largest beneficiary, securing $136.4 million in contracts, including $19.2 million from Shared Services Canada, one of the very departments now facing significant job losses. Another firm, Accenture, was awarded contracts valued at $261.5 million in the same year.

This persistent spending has led to accusations that the government is de-skilling its own workforce, hollowing out institutional knowledge, and creating a dependency on private contractors who take their expertise with them when a contract ends.

A Looming Crisis in Public Services

The impact of these cuts is not merely a matter of internal government operations; unions warn it will be felt by every Canadian. Over the past week, workforce adjustment notices have been issued across a wide swath of government, including Statistics Canada, Shared Services Canada, Public Services and Procurement Canada, and the Treasury Board Secretariat.

“When jobs are cut, programs slow down, people wait longer, and communities lose the support they rely on every day,” warned Sharon DeSousa, President of the Public Service Alliance of Canada (PSAC).

Specific areas of concern include:

• Cybersecurity: Cuts at Shared Services Canada are seen as a direct threat to the security of the nation's digital infrastructure. Unions argue that outsourcing cyber protection creates security gaps and slows down response times to critical threats.
• Data Integrity: Statistics Canada is set to lose around 850 staff. This reduction in skilled workers puts the quality and timeliness of essential data—from inflation numbers to employment figures—at risk, undermining the evidence-based decision-making that governments and businesses rely on.
• Service Delivery: The public can expect to see tangible consequences, with potential for longer wait times for passports, Employment Insurance, and other essential services.

“These are core public services Canadians rely on every day,” O’Reilly emphasized. “Slashing capacity across these federal departments weakens cybersecurity, undermines evidence-based decision-making, and delays service delivery. Cuts today mean crisis tomorrow.”

The Human Cost and a 'Brain Drain' Threat

Beyond the fiscal and operational impacts, the ongoing cuts have triggered a severe crisis in morale across the public service. The 2024 Public Service Employee Survey (PSES) paints a grim picture of a workforce under immense strain. The survey revealed that 35% of federal employees felt “always” or “often” emotionally drained from their work, a significant increase from 28% in 2022. Confidence in senior management has plummeted, dropping from 64% to 55% in the same period.

Most alarmingly for the long-term health of the public service, 36% of respondents indicated an intent to leave their current position within the next two years. This growing dissatisfaction and job insecurity are fueling fears of a massive “brain drain,” where the government loses its most experienced and talented professionals, making it harder to attract new talent in the future.

The anxiety is palpable among employees who now find themselves competing against colleagues for a shrinking number of positions, all while watching external consultants perform similar roles without the same uncertainty. As the protestors marched towards Parliament Hill, their presence served as a stark reminder of the human cost of the government's expenditure review, leaving a lingering question in the cold January air: at what price do these savings truly come?