By Nicolas Maltais 
When Prime Minister Mark Carney declared that federal spending had been growing at over 7% a year—about twice the pace of the economy—his message was clear: Ottawa is heading into an age of austerity. As a union member, I felt a chill of déjà vu. We’ve heard this kind of warning before, and we know what often comes next. An “austerity budget” may sound like a prudent tightening of the belt, but for those of us on the ground in the federal public service, it usually means cuts that hit not just workers, but the Canadians we serve.
Unsustainable Spending or Unnecessary Panic?
Let’s start with the government’s perspective. Carney isn’t entirely wrong to point out that spending can’t outstrip economic growth forever. No family or business can keep spending beyond their means indefinitely; the same logic applies to a country. After a decade of stimulus, pandemic emergency funds, and new programs, the federal books are straining. Interest rates are higher now, making debt more expensive to carry. It’s fair to worry about saddling future generations with unsustainable debt. Even those of us in the labour movement acknowledge that stable public finances matter in the long run—after all, we want the services we deliver to be funded not just this year, but every year. So yes, some fiscal discipline is understandable.
But “discipline” is one thing; an austerity crusade is another. The government has asked departments to slash their budgets by 15% over the next three years (starting with a hefty 7.5% cut in the coming fiscal year alone). This goes beyond trimming fat—cuts of that magnitude reach deep into muscle and bone. It’s the most severe rollback we’ve seen since the 1990s, when Paul Martin’s austerity and later Stephen Harper’s cutbacks left lasting scars on public services. I remember the fallout from those eras: veterans who couldn’t access the care they needed because Veterans Affairs offices were shuttered, border agents stretched so thin that security was nearly compromised, food inspection programs scaled back even as Canadians worried about food safety. That history weighs on every unionized public servant who hears the word “austerity” today.
A Growing Population, A Growing Need
There’s an important piece of context missing from Carney’s 7%-a-year spending alarm: Canada’s population has been exploding. In the past couple of years, our country has seen record-high immigration and population growth. Just last year, Canada grew by over a million people—the first time we’ve ever added that many in a single year. We surpassed 40 million people in 2023, and we’re still climbing. Think about that: a larger population naturally requires more government services. More new Canadians means more paperwork for immigration officers, more demand for health care and education (even if those are provincial systems, they rely on federal funding), more people filing taxes and drawing benefits. In short, more people equals more public spending, by default.
So yes, federal expenditures have risen, but not simply due to government profligacy or waste—it’s also because Canada itself has grown and changed. We’ve welcomed hundreds of thousands of newcomers each year, on top of an aging population needing more support. If we didn’t increase spending significantly, we would have seen public services per person deteriorate badly. In fact, many Canadians might say they already feel the pinch: recall the long passport office lineups and EI phone hold times in recent years. Those problems happened before any new austerity; they were warnings that our services were struggling to keep up with demand. Cutting budgets now, when our population is larger than ever, risks pouring gasoline on that fire.
Public Service Unions on the Front Line
For federal public service unions like mine—the Public Service Alliance of Canada (PSAC) and others—an austerity budget isn’t an abstract policy choice. It’s personal. It means our members’ jobs and livelihoods are at stake, and so are the quality of services we provide to Canadians. Over 10,000 federal jobs were eliminated in the past year alone through early retirements and attrition, and many of those were PSAC members. Now, with the government sharpening the knives for deeper cuts, thousands more workers face the prospect of pink slips or “workforce adjustment” notices informing them their position might disappear. These aren’t just numbers on a balance sheet; they’re the people who process your passport application, answer the phones at the Revenue Canada call centre when you have a problem receiving your Canada Child Benefit or disability tax credit, or inspect the food coming across our borders to ensure it’s safe. When their jobs vanish, the services they deliver vanish too—period.
Our union has been here before, and we’re gearing up for a fight we hoped we wouldn’t have to revisit. Just a couple of years ago, in 2023, PSAC members hit the picket lines in one of the largest national strikes in Canadian history, pressing for fair wages and better working conditions after years of stagnation. The public surprisingly supported us, understanding that our fight was about keeping federal jobs decent—and by extension, protecting the integrity of public services. We won modest wage gains that helped offset inflation, and we returned to work ready to serve. Now imagine telling that same workforce, “Thanks for your service, but we’re now cutting 15% of you and expecting the rest to do more with less.” It’s a recipe for low morale, and it feels like a betrayal of the people who got us through the pandemic and already strained times.
The government talks about finding “efficiencies.” That sounds nice, but in practice it often means hiring freezes, positions left unfilled, and a heavier workload dumped on those who remain. It means experienced scientists, inspectors, clerks, and IT specialists being shown the door to meet an arbitrary cost-cutting target. It means younger workers on contracts or in junior roles—many of whom were just starting their careers in public service—lose their jobs first and suddenly have to scramble for work, even as crucial programs are left understaffed. And if the cuts continue as projected, it won’t stop with the junior ranks. Programs will inevitably be axed or hollowed out. We could see entire regional offices close or services centralized far from the communities that rely on them.
Services Canadians Rely On at Risk
I cannot stress this enough: cutting public service jobs directly translates into cutting public services. Take the Canada Revenue Agency as an example. The CRA has already lost thousands of employees recently, and more cuts are slated. Those workers aren’t paper-pushers no one will miss—they are the people who answer citizens’ tax questions and, critically, who go after tax cheats to bring in revenue. Every auditor or collector you remove from CRA’s roster is money left on the table from taxes not collected. Starving the tax agency is a bizarre way to balance a budget—it’s like burning your furniture to stay warm, short-sighted and self-defeating.
Or consider Immigration, Refugees and Citizenship Canada (IRCC). Canada is bringing in record numbers of immigrants and refugees, partly to address labour shortages and demographic challenges. Yet IRCC’s staff is being trimmed just when their workload is at an all-time high. The result? Longer processing times for visas and citizenship, longer wait times for newcomers trying to reunite with family or get paperwork to start jobs. If you thought the backlog and delays in immigration were bad before, austerity will make them much worse. That hurts Canada’s reputation and our economy, not to mention real people’s lives hanging in limbo.
Then there are the services everyone sees day-to-day: the wait at Service Canada centers for your pension or EI issues, the time it takes to speak to a live agent at an agency, the safety inspections we count on. Austerity budgets often claim they’ll spare “front-line” services, but I have trouble believing that. You cannot slice away thousands of behind-the-scenes workers—policy analysts, support staff, technicians—and not have it trickle down to front-line impacts. Inevitably, the lineups grow, the phone calls go unanswered, or the quality of oversight drops. We all pay the price for that, not just public servants.
Ripple Effects Across the Labour Movement
It’s not only federal workers who should brace for the impact. A federal austerity budget sets a tone that other levels of government and even private employers may follow. Provincial governments watching Ottawa wield the axe might feel emboldened to enact their own cuts in the name of “fiscal responsibility.” That could mean pressure on provincial public sectors—nurses, teachers, municipal workers—to accept wage freezes or staffing cuts as “the new normal.” We saw this in the 1990s: Ottawa slashed spending and downloaded costs to provinces, which in turn squeezed local services. That era led to hospital closures, larger class sizes in schools, and a general deterioration of programs that took years to rebuild. Unions from the Canadian Union of Public Employees (which represents many provincial and municipal workers) to teachers’ federations remember those fights well. They’ll be on high alert now, knowing that if the federal government is trimming its workforce, their sectors could be next on the chopping block through reduced transfer payments or just by ideological momentum.
The climate of austerity can also spill into private sector labor relations. If the public sector—the country’s largest employer—restrains wages and headcount, it can dampen overall wage growth and job security expectations. Employers in other industries might take a harder line in collective bargaining, citing tough economic times or lower public spending. It’s a bit of a domino effect: one big player pulls back, and others follow. For example, if infrastructure funding is cut in Ottawa’s belt-tightening, construction projects could slow down, impacting building trades unions. And if cultural programs or manufacturing support are scaled back, unions in those fields (like artists’ unions or Unifor in the auto sector) may find fewer opportunities and less government willingness to step in to save jobs during downturns. Importantly, when tens of thousands of federal jobs are lost, all those workers tightening their belts means less spending in their local communities, affecting businesses and potentially private-sector employment too. In short, an austerity budget might start in Ottawa, but its shockwaves can be felt on factory floors and in city halls across Canada.
Finding a Better Path Forward
Unions like mine aren’t naively asking for blank cheques from the government. We understand the need for efficiency and the value of each taxpayer dollar. In fact, who better to identify waste than the people doing the work? Time and again, public service unions have offered ideas to save money without undermining services. For instance, the government’s spending on high-priced outside consultants has ballooned in recent years; cutting back on those contracts could save billions. Why pay private firms huge sums to tell public servants how to do their jobs when the public servants themselves often have the answers at a fraction of the cost? Similarly, the insistence on dragging workers back to the office even when remote work proved effective has costs—maintaining big offices, travel, lost productivity. Embracing modern, flexible work could reduce overhead without cutting service delivery. These are the kinds of solutions we’ve put on the table. The frustrating part is that austerity enthusiasts rarely seem interested in them. It’s often politically easier to announce across-the-board cuts than to tackle the harder work of reforming procurement, closing tax loopholes, or asking the wealthiest to pay a bit more. But those tougher choices could improve the fiscal picture without punishing ordinary workers or hurting the public.
From a union perspective, an austerity budget feels like being told to fix a mismanaged household by selling off the furniture. It might balance the books this year, but it makes the house awfully bare and uncomfortable to live in. And if the root problems—like revenue issues or specific inefficiencies—aren’t addressed, we’ll be right back in the red a few years down the line, living in a poorer country with weaker services for no good reason.
Standing Up for Fairness and Quality Services
I won’t pretend to be neutral here: I believe this austerity push is the wrong approach, and I know many of my union colleagues do too. We’re not just protecting our paycheques; we’re standing up for the idea that Canadians deserve strong public services, especially in a time of growth and change. Yes, balance the budget, but do it fairly. Don’t balance it on the backs of the workers who keep this country running. Don’t balance it by short-changing the new immigrants and seniors and families who count on government programs.
There’s a human face to every budget cut. As unions, our job is to remind the government of those faces—and if needed, to put up a fight when we see ordinary Canadians and workers bearing an unfair burden. We will be honest and pragmatic in that fight. If some measures truly are wasteful, we won’t oppose them just out of spite. But we will be passionate in defending what matters.
Austerity for austerity’s sake is a choice, not an inevitability. Canada is not broke; our economy is growing, our population is expanding, and our potential is enormous. We can afford to invest in our people and our public infrastructure as we grow. In fact, we can’t afford not to. A budget is ultimately a statement of values. On November 4th, this coming budget will tell us whether the government values public services and the workers who deliver them, or whether it sees them as easy targets for the chopping block. If it’s the latter, you can bet unions across this country—PSAC and beyond—will speak up loudly, as we always have, for a more balanced, fair, and forward-looking path. We’ve lived through austerity before, and we know it doesn’t end well. Let’s not learn those lessons all over again the hard way.