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The Bank of Canada will fire 225 staff to help meet a 15 per cent budget cut as Mark Carney slashes public services funding and prepares the country for more trade turmoil with the US.

On Wednesday a Bank of Canada spokesperson confirmed the reduction “in all departments” of the central bank as part of a wider move to lay off 16,000 public sector workers over the next three years.

“After starting with vacancies, attrition and voluntary retirements, we expect to reduce staffing levels further by about 225 positions by June of next year,” the spokesperson said.

The Bank of Canada, where Carney was governor from 2008 to 2013 in the aftermath of the global financial crisis, is moving to align with a government-wide spending review announced on Tuesday in the prime minister’s first budget since taking office.

“We are committed to achieving a 15 per cent budget reduction over the 2026-28 period,” said the spokesperson. The sackings amount to under 10 per cent of the central bank’s nearly 2,400 staff.

The central bank sets monetary policy and also monitors financial conditions, designs and distributes bank notes, and produces economic research.

On Tuesday Carney said the federal government would spend C$141bn (US$100bn) to offset the effects of the US’s trade war. The spending will be partially offset by about C$51bn in cuts and other savings — and increase Canada’s budget deficit to C$78.3bn, up from C$42.2bn forecast in December.

President Donald Trump has imposed steep tariffs on Canada, the US’s second-largest trading partner, targeting steel, cars and other exports south of the border. The Bank of Canada cut interest rates last week as it warned of “structural” damage to the country’s economy caused by the US president’s trade war.

The public sector was a big loser in Canada’s budget as Carney trimmed a civil service that grew substantially under former Liberal party leader Justin Trudeau.

The stimulus budget aims to bolster an economy that was struggling with low productivity even before Trump’s tariffs rattle key export-oriented sectors.

The Public Service Alliance of Canada, the union representing civil servants, said on Tuesday that Canadians were concerned about the impact of cuts on already strained public services.

The prime minister’s office and ministry of finance did not respond to requests for comment.