A coalition of Canadian technology executives, Build Canada, is calling on the federal government to cut about 110,000 public service jobs and replace many administrative roles with artificial intelligence tools.
The group, co-founded by Shopify CEO Tobias Lütke, aims to reduce government spending while accelerating digital transformation across federal agencies.
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In a policy post, KOHO CEO Daniel Eberhard outlined the proposed cuts, stating that eliminating 110,000 positions would save approximately $15 billion per year, or about 19 percent of the expected 2025-26 deficit.
Eberhard noted that the current government target of reducing the workforce by roughly 40,000 employees by 2028-29 is a step in the right direction but should be treated as a minimum, not a final goal.
Compensation Reform and AI Integration
Eberhard argued that payroll expenses for remaining civil servants must be restructured alongside workforce reductions to ensure lasting fiscal efficiency.
“Pair headcount reductions with compensation and accountability reform to ensure savings are real.
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With per-employee costs rising on average 3.8 percent annually, we will have completely eroded savings from headcount cuts by 2030,” he said.
To maintain operational output with fewer personnel, the proposal emphasizes replacing administrative staff with machine learning models and automated systems.
“Modernize government services by going AI-first to improve productivity and efficiency,” Eberhard added.
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The policy push comes as lobbying activity by tech executives increases in Ottawa, with Shopify representatives holding multiple meetings with federal officials following recent corporate government relations appointments.
