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The agency has been examining its operating budget for more than two years to meet a demand from the government to find savings. 

The officials said the CRA needs to reassess the way it works to respond to the job losses including reconsidering how many projects it takes on, streamlining its processes and finding ways to innovate.

“It is likely that some internal services will be impacted, with some services being eliminated entirely,” said the message.

It didn’t specify which services might be eliminated but did say the Digital Transformation Program Branch will no longer be an independent part of the agency, and instead will have its work absorbed into other parts of the agency.

The Canada Revenue Agency job cuts will impact branches across the CRA but the reductions will mainly impact employees in the National Capital Region. Executive positions are also being impacted by the reductions.

The CRA is one of several government organizations that has recently announced job reductions.

Matthew Brett, a spokesman for the Canada Employment and Immigration Union, confirmed Friday that Employment and Social Development Canada (ESDC) is terminating about 800 term positions in the passport program.

Job losses will take place across the country, with the effective end date for the positions at the end of June.

A spokesperson for ESDC said in an email that the decision was “necessary” and “not taken lightly,” adding: “Service Canada, which delivers the Passport Program in Canada on behalf of Immigration, Refugees and Citizenship Canada (IRCC), continually assesses its valued and highly skilled workforce levels to align with forecasted volumes, to ensure adequate staffing capacity for processing. As a cost recovery program, Service Canada’s workforce levels for the Passport Program (are) being aligned as of the end of June 2025 to a decreased volume of passport applications now being forecasted by IRCC for 2025-26.”

Treasury Board Secretariat records show that ESDC has 39,154 employees, up from 39,089 employees in 2021. During the first year of the COVID-19 pandemic the department’s ranks grew significantly, from 27,115 in 2020 to 32,697 in 2021.

The Canada Revenue Agency will initially seek out volunteers who may be looking to leave the agency, but the officials said in their message the agency can’t live up to the Government of Canada policy to offer permanent employees affected by layoffs a “reasonable job offer” elsewhere in the public service where possible. 

“Unlike previous (workforce adjustments), due to fiscal constraints, guaranteed reasonable job offers cannot be provided to most of the employees affected,” it says.

Earlier this month, the Union of Taxation Employees announced that the Canada Revenue Agency wouldn’t renew contracts for more than 1,000 term workers across the country. More than 3,000 jobs at the agency have been cut since 2024, the union says, including debt collector and call centre positions.

CRA spokesman Etienne Biram says a number of factors have impacted the CRA’s budget in recent years, including the sunsetting of COVID program funding. 

The Government of Canada website says that, in 2025, a total of 52,499 people work at the CRA, down from 59,155 in 2024. But the number is still about 20 per cent higher than in 2019, when there were 43,908 employees.

In light of the new cuts, the Union of Taxation Employees says it’s demanding accountability from the Government of Canada and calling for “an immediate moratorium” on job cuts at CRA. 

“With every position eliminated, processing delays grow longer, calls go unanswered, files pile up, and citizens are left behind in uncertainty,” union head Marc Brière said in a news release Friday. “Those who remain are being pushed beyond their limits — expected to do more with less, while working under mounting stress and growing job insecurity.”

The federal public service shrank for the first time in a decade, in the last year Treasury Board Secretariat data show. 

Between 2024 and 2025, the number of government employees dropped by 10,000, from 367,772 to 357,965.

In 2015, there were 258,979 people working for the federal government.

This report by The Canadian Press was first published May 23, 2025.