DM/CDS Message: Budget 2025 – Spending review and workforce implications

DM/CDS Message: Budget 2025 - Spending review and workforce implications

December 10, 2025 - Defence Stories

We know many of you have questions about what Budget 2025 means for your work, your teams, and the future of the Defence Team. You want clarity on job security, upcoming changes, and how investments in defence will shape our organization.

In our last message regarding Budget 2025, we highlighted that the proposed generational investment of an incremental $81.8 billion over five years is to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF). This will be achieved by investing in the personnel, equipment, training, and infrastructure needed to protect Canadians and to promote international security with our allies and partners. It also enables the modernization of defence procurement and rebuilding of Canada's defence production capacity.

In part to enable this funding for the Defence Team, a government-wide commitment was made to spend less on day-to-day operating costs, so that more can be invested in nation-building initiatives.

Budget 2025 outlines the Defence Team's plan to reduce operating costs by approximately $460 million per year starting next fiscal year (2026-27) and ongoing. This plan includes:

• Continuing our coordinated Fleet Divestment Strategy by which we are retiring fleets nearing the end of their service life, transitioning personnel to higher-priority work, and planning for the replacement fleets.
• Streamlining our real property portfolio by divesting underused, obsolete, and surplus properties, to save on ongoing maintenance and utility costs.
• Expanding the use of energy performance contracts at bases, wings, and installations, to modernize defence infrastructure and support Canada's net-zero goals.
• Modernizing project approval and internal business processes to reduce administrative burden and focus efforts on delivering high-value initiatives.

Implementation of these cost reduction measures has only just begun. For the Defence Team, achieving these savings goes hand in hand with prioritizing the use of our resources - our workforce and our funding - to deliver better value for money across our functions, including procurement, infrastructure, technology, and modernization initiatives.

We want to reassure you that no job losses at the Department of National Defence (DND) are anticipated because of these measures. Our organization remains in a period of growth, supported by significant long-term defence investments that continue to strengthen our operational readiness, our capabilities, and the civilian and military workforce underpinning them. This includes ongoing efforts to transform our organizational structures - beginning with the recent establishment of the Canadian Joint Forces Command, and with more to come in the months ahead. All of us will have a part to play as we consolidate our structures and streamline our processes with the sense of urgency required to meet today's needs while preparing for the future.

We are doing our part to support our public service partners and colleagues across government by considering affected employees through the establishment of at-level deployment inventories and promoting workforce mobility.

Budget 2025 also introduced the new Early Retirement Incentive (ERI). The ERI program is subject to approval by Parliament, and specific parameters are still to be determined by the Treasury Board. Further information will be communicated once it is available. We recommend that employees wait before contacting the Pension Centre with questions, as it is similarly awaiting more details.

Taken together, the investments, savings, and other measures announced in Budget 2025 reflect a transformational time for the Defence Team and for our public service colleagues across government.

We are committed to keeping you informed as our work advances on these initiatives, and to providing the support you need to achieve our shared goals.

Should you or someone you know be affected by workforce adjustment, the Employee Assistance Program (EAP) offers assistance. The EAP supports DND public service employees and their family members with a wide range of personal, family, and work-related concerns. CAF members can access support through the Canadian Forces Member Assistance Program.

Thank you for your support.