OTTAWA’S NEW FEDERAL BUDGET BOOSTS YOUTH EMPLOYMENT AND HOUSING — BUT DEEP PUBLIC-SERVICE CUTS THEATEN THE CO-OP AND ENTRY-LEVEL JOBS STUDENTS RELY ON.
On November 4, 2025, the federal government unveiled its highly anticipated budget. The plan sets out two big, seemingly contradictory directions: major investments in infrastructure, skills, housing and youth employment, alongside deep cost-cuts, including federal government operations and public-service employment.
For students at the University of Ottawa — especially undergraduates and those doing co-ops in the federal public service — this budget lands somewhere between opportunity and warning.
U of O Young Liberals club weighs in
A clear positive for students is the budget’s commitment to youth employment and student job placement. More than 1 billion dollars over several years is allocated to expand opportunities such as the Canada Summer Jobs program and the Student Work Placement Program.
“This budget is good news for students looking for a job or a co-op placement,” said Martin Spielauer, director of policy for the U of O Young Liberals Club. “It will support around 55,000 work-integrated learning opportunities in 2026-27 alone, as well as 100,000 summer jobs through the Canada Summer Jobs program. Not only does it help students find full-time work, it also helps small businesses and nonprofits run their operations. It’s a very productive investment.”
Spielauer added that affordability and employment remain the biggest concerns for young people:
“When unemployment and price levels are unstable, students feel it the most. Students expect efficient policies to build affordable homes, create jobs, and support them — and rightfully so. Budget 2025 does exactly that.”
For a student at U of O, especially in English or social-science disciplines where co-ops may not always be as abundant as in STEM fields, these signals are important: the government is explicitly prioritizing student work opportunities.
Infrastructure, housing, and growth investments
The broader narrative of the budget emphasizes shifting spending toward growth-oriented investments, building infrastructure, increasing competition, and reducing some costs. Lowering costs and expanding opportunities could indirectly benefit students through stronger infrastructure, more jobs, and improved services.
The budget creates a new housing agency — Build Canada Homes — tasked with using domestic materials and new technology to reduce building costs. Spielauer called it “a generational investment that would build non-market housing units that are not profit-driven and offer lower costs for homebuyers and renters” that would “finally encourage private developers to lower their prices through increased supply and competition”.
U of O NDP club weighs in
The U of O New Democratic Party campus club (UONDP) says the new federal budget strays from progressive priorities and could worsen affordability challenges for students.
“The federal budget just announced certainly diverges from the values of many New Democrats,” says Jordi Malcolm, co-president of the UONDP.
“What we’re seeing is an austerity budget that on the surface says it will increase affordability, employment, and ‘invest in Canada’, but in actuality will eliminate tens of thousands of jobs in the public service and affect many resources Canadians rely on.”
Malcolm pointed to the Liberal government’s pledge to create 100,00 summer jobs for students as positive in theory, but questioned its feasibility.
“I’m not sure how they plan to do so when they’re cutting billions from the very departments that would usually hire students in the summers.”
When it comes to social equity, Malcolm said the budget is lacking.
“We’re seeing cuts projected to Veteran Affairs, Indigenous Services, and Women and Gender Equality,” Malcolm continued. “This is of course very disappointing to many young New Democrats and progressive activists.”
Malcolm said she would like to see amendments made to the plan as Parliament debates its implementation in the coming weeks.
Cut to public-service jobs raise concerns for students
Chapter 5 of Budget 2025, “Creating a more efficient and effective government”, promises a significant reduction in federal government operating expenditures, including staff. The budget document shows that savings from the “Comprehensive Expenditure Review” will yield billions in reduced spending in the next few years.
The Public Service Alliance of Canada reports the government plans to cut over 40,000 federal public-service jobs over the next three years. These concern entry-level roles, which many co-op students and recent grads hope to obtain, and will be the hardest hit as the government right sizes its operations.
For many U of O students, a federal government co-op or entry-level job is a gateway into long-term employment after graduating. If the federal public service is significantly reducing positions, especially in operations and support roles, that dynamic changes. The competition for fewer roles may increase, the nature of roles may shift — with more automation or outsourcing — and the foot-in-the-door effect for recent grads may weaken.
Student financial assistance faces tightening
The budget also proposes changes to student-financial assistance, noted in the budget table for Chapter 5. There are savings targeted for “Improving the Integrity of Student Financial Assistance,” marking around $253 million over the next two years. While these may not be immediate reductions in grants and loans for students, they signal tighter administration and possibly higher eligibility thresholds — something students should watch closely.
Sacrifice and the student generation
Budget 2025 sends mixed signals to students. On one hand, it may offer opportunities like work placements, research, and long-term infrastructure. On the other hand, it withdraws many of the entry-level federal roles that have long served as stepping-stones for graduates.
Budget 2025 is all about “spending less to invest more.” The coming years will test whether these investments truly reach young Canadians — and whether the co-ops, grants, and housing they depend on remain within reach.
During his recent address at the University of Ottawa, Prime Minister Mark Carney framed the government’s approach as one of sacrifice, directly telling young Canadians to be patient and prepared to make sacrifices. In the context of Budget 2025, that message rings especially true: opportunity, yes — but at a cost that students may feel first.
