The year 2026 is shaping up to be another period of significant transformation and challenge for Canada's federal public servants. Following a turbulent 2025 marked by a change in government and initial workforce reductions, employees are bracing for the full impact of Prime Minister Mark Carney's agenda.
Navigating Workforce Adjustments and Cuts
The most immediate concern for many is the ongoing plan to reduce the size of the federal public service. The government aims to cut tens of thousands of jobs, with around 30,000 positions ultimately on the line. While the exact number of cuts slated for 2026 remains unclear, the process is already in motion.
More departments are confirmed to send out workforce adjustment notices to affected employees in mid-January. This follows letters sent to approximately 68,000 public servants in December 2025, notifying them of their eligibility for an early retirement incentive program. The workforce adjustment process is designed to seek alternative employment for displaced workers where possible, but the scale of the expected reductions points to a major reshaping of the bureaucracy.
New Priorities and External Leadership
Despite the overall reduction in headcount, Prime Minister Carney's government is establishing new agencies to advance key policy goals. Notably, these organizations are being led by executives from outside the traditional federal public service, signaling a distinct approach.
Dawn Farrell, former CEO of Trans Mountain Corporation, now heads the new Major Projects Office, tasked with accelerating major resource developments. Meanwhile, Ana Bailão, ex-deputy mayor of Toronto, leads the Build Canada Homes agency, focused on incentivizing housing construction nationwide.
Another critical story to follow is the potential shift in remote work policies. Rumors surfaced in late 2025 about a possible full return to the office, a move that would reverse the hybrid models adopted in recent years. This comes as the government continues its transition from the problematic Phoenix pay system to the new Dayforce platform across several departments.
The Role of Technology and AI
Beyond personnel changes, technological adoption will be a major theme. The integration of artificial intelligence into government operations is expected to accelerate, potentially changing workflows and service delivery. Public servants will need to monitor how AI policies are implemented and what training or support is provided to navigate this shift.
As 2026 unfolds, federal employees in Ottawa and across Canada will be closely watching these developments. The convergence of significant job cuts, organizational restructuring, and technological change promises to make it a defining year for the public service.
