DM/CDS Message regarding Budget 2025

November 5, 2025 – Defence Stories

Further to the Clerk’s message to all employees yesterday, we would like to provide additional information on Budget 2025 and the measures relating to our organization and the broader federal public service. These measures will support the government’s priority of spending less on government operations and investing more to strengthen the country.

Proposed Investments

Budget 2025 proposes investing $81.8 billion over five years on a cash basis, starting in 2025–26, to rebuild, rearm, and reinvest in the Canadian Armed Forces. This includes the funding of over $9 billion in 2025–26 that was announced by the Prime Minister in June 2025.

Budget 2025 also notes the creation of the Defence Investment Agency and progress on the Defence Industrial Strategy to rebuild Canada’s defence production capacity and secure our supply chains.

Proposed Savings

Budget 2025 outlines $13 billion in annual savings by 2028–29 across more than 100 federal organizations as a result of the Comprehensive Expenditure Review. For the Defence Team, this represents savings of approximately $460 million per year from 2026–27 and ongoing, mainly based on retiring older and less efficient fleets.

We are reviewing these savings to assess what they mean for our organization. Work to implement them will only begin if the Budget has the support of Parliament, so we will share additional information with you once the House of Commons’ debate and vote take place.

These savings are an opportunity – as the Clerk has asked – to focus on the government’s priorities, to simplify our internal processes, and to show accountability for our advice and decisions, commitment to results, and taking initiative.

The Budget also proposes to return the public service to a more sustainable level of 330,000 employees across government by 2028–29. This includes a reduction of 1,000 executive positions over the next two years to ensure public service adjustments include leadership.

Where there are impacts on work units or positions in our organization, our goal will be to minimize the impacts on our employees. We will use all the tools at our disposal, including attrition and the existing workforce adjustment provisions that have been co-developed or negotiated with your representatives, the bargaining agents. For executives, career transition measures are available.

To manage reductions to the greatest extent possible through attrition and voluntary departures, Budget 2025 proposes to introduce a voluntary early retirement incentive program, which would allow eligible employees to retire with an immediate pension based on their years of service with no reduction for early retirement.

Finally, Budget 2025 announces the government's intention to initiate consultations with key stakeholders to account for CPP and QPP enhancements and ensure that federal employees continue to receive the same pension benefits, without overcontributing. Importantly, these changes would have no impact on your pension (equal to about 2 per cent of your salary for each year of service). They would result in savings for the government and employees through a decrease in contribution rates. The same adjustment was already made to members of the Parliamentary Pension Plan starting January 1, 2025.

The investments, savings, and other measures announced in Budget 2025 reflect a transformational time for the public service. While we revisit how we work and how we can best serve Canadians, this change will understandably be stressful. We encourage you to connect with your manager or chain of command, who are there to support you through this transition, as needed.

As the Clerk affirmed in his message yesterday, we will continue to act transparently, make decisions quickly, support our people, and be guided by our values of fairness, consistency, and respect for diversity.

Some information about these measures has been published on Canada.ca and will continue to be updated in the coming weeks. We commit to sharing additional information as soon as we can.

Thank you,