Government extends contracts of 750 pay centre workers to manage job cuts

OTTAWA — The federal government is extending the contracts of about 750 term workers at its pay centre to manage a surge in expected job cuts.

Nicole Allen, spokesperson for Public Services and Procurement Canada, says the department is focused on smoothing the process and paperwork for those who are losing their jobs or leaving voluntarily.

She says extending the contracts will enable the pay centre to handle the increase in transactions related to service terminations.

The federal government has committed to cutting the number of public service jobs by about 40,000 from a 2023-24 peak of 368,000 as it looks to find savings.

Thousands of federal public servants have applied for an early retirement program launched by the government earlier this year.

Allen says the contract extensions run until December 2026.

This report by The Canadian Press was first published May 12, 2026.

Catherine Morrison, The Canadian Press