Report

Projecting Federal Personnel Expenses

Aug 28, 2025

The PBO’s fiscal model includes a federal personnel spending module. This module has been enhanced to provide a more detailed framework regarding in-year personnel changes across federal organizations, including characteristics such as employment tenure.

Highlights

Personnel costs are the largest component of federal operating spending, estimated at $71.1 billion in 2024-25.
The Parliamentary Budget Officer (PBO) is improving and expanding its modelling of personnel spending. These changes are necessary to monitor the Government’s contemplated operational restructuring, which may involve staffing changes across federal organizations.
To this end, the expanded model will now incorporate higher frequency staffing data from federal pay systems and a greater breadth of information. This includes staffing movements by tenure (for example, indeterminate status) and, for the first time, a separate projection of non-civilian federal staffing (for example, National Defence).
In the absence of expenditure restraint exercises, PBO projects that personnel spending will rise to $76.2 billion by 2029-30. This is approximately two per cent higher than our March 2025 projection, reflecting new Departmental Plan data and modelling improvements. PBO now projects that indeterminate federal employees will increase to 87 per cent of all FTEs—the highest percentage since 2015.
Compared to our March 2025 projection, growth in personnel expenses is driven by an increase in the number of full-time-equivalents (FTEs), projected to reach almost 442,000 by 2029-30. Overall compensation per FTE (including pensions and other benefits) is projected to reach over $172,000 by 2029-30, largely driven by salaries and wages and other standard compensation.
This projection does not reflect federal announcements made after May 2025. That is, neither the June 2025 additional spending for the Canadian Armed Forces nor potential impacts from the recently launched Comprehensive Expenditure Review are incorporated. As such, it provides a baseline for the anticipated policy changes to be announced in Budget 2025.