Part of government-wide effort to curb public spending, cut long-term costs
The Bank of Canada will eliminate roughly one-tenth of its workforce in the coming months, part of a government-wide effort by Prime Minister Mark Carney’s administration to curb public spending and reduce long-term costs.
According to a memo obtained by Bloomberg News, about 225 positions will be cut at the central bank by June, representing roughly 10 percent of total headcount.
The institution said the move was necessary to meet a self-imposed target of cutting overall operating costs by 10 percent by the end of 2026.
Cost-cutting measures
A spokesperson for the Bank of Canada told Bloomberg that the organization “will align with Carney’s request to save money, as it has done with similar programs in the past.”
The bank has already tightened non-salary budgets, reduced recruitment, and expanded early retirement options. However, those measures “won’t be enough to reach the 10% budget cost savings the bank committed to by the end of 2026,” the memo said.
Paul Badertscher, a Bank of Canada spokesperson, said in an emailed statement that “reductions are happening in all departments.” He added that the bank “will make sure that the bank remains able to deliver on its mandate for Canadians.”
The announcement marks one of the most visible examples of public-sector restructuring since Carney took office. The central bank has grown significantly since the pandemic, employing 2,350 people at the end of 2023, up from around 1,800 in 2019, according to media reports.
Budget 2025: streamlining
The staffing cuts at the Bank of Canada are part of a sweeping fiscal review unveiled this week by Finance Minister François-Philippe Champagne as part of Budget 2025. The plan calls for $60 billion in savings over five years, largely through attrition and a reduction of about 40,000 federal positions.
In a letter to civil servants, Privy Council Clerk Michael Sabia, the head of Canada’s public service, acknowledged that the job reductions would have “real consequences for people who serve their country and for their families. I am not going to try to diminish those consequences. They are real.”
Sabia added that achieving the targeted savings would involve “reducing a number of programs, limiting the scope of some and terminating others outright,” according to the Financial Post.
Redefining bank’s role
The Carney government has simultaneously assigned the Bank of Canada new responsibilities, including oversight of the forthcoming Consumer-Driven Banking Act — an initiative aimed at regulating the rapidly evolving fintech sector.
To support those functions, the government said the bank could retain additional remittances to fund new projects, even as it pursues cost savings elsewhere.
The central bank has also committed to an additional 5 percent reduction in “corporate-level expenditures” by the end of 2028, according to Bloomberg.
