Early retirement program will slash departmental budgets
Federal departments losing employees to early retirement will see their operating budgets cut by half each person's salary.
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The federal Early Retirement Incentive program will reduce departmental operating budgets by half the salary of each approved employee — meaning a department losing someone who made $100,000 loses $50,000 from its budget. Around 2,800 public servants have already been approved for the program, while about 6,800 eligible employees have applied.
Some departments, including CSIS, the RCMP, and border services, have said they will not approve any early retirements, citing operational pressures. The deadline for applications is July 24, 2026, with more approvals expected after that date. The program, announced in Budget 2025, aims to reduce layoffs by enabling voluntary departures, though critics worry it could hamstring operational capacity in stretched departments.