Over the last eight years, the Trudeau government has expanded the size of the federal public service to ensure it plays a more active role in the Canadian economy. However, there’s little evidence this bigger government has made Canadians better off.
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According to the Public Service Commission of Canada, the size of the federal public service reached 274,219 employees in 2022/23 — an increase of 40.4% since 2014/15. According to data from the Parliamentary Budget Officer, total compensation for federal bureaucrats (adjusted for inflation) increased by nearly 37% between 2015/16 and 2021/22.
This is occurring even as government workers in Canada already enjoy a substantial wage and benefit premium compared to comparable workers in the private sector. According to a recent study published by the Fraser Institute, in 2021 (the latest year of comparable data) government workers at all levels (federal, provincial and local) received wages that were 8.5% higher, on average, than Canadians employed in the private sector. (The study controls for factors such as gender, age, education, tenure and industry to provide an “apples to apples” comparison among workers.)
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However, higher compensation and the increasing size of the federal public service have not provided better access to government programs and services or translated into tangible economic results for Canadians.
A recent poll found only 16% of Canadians believe they get good or great value from the services they receive from governments such as health care, education, police, roads and national defence. Nearly half (44%) of Canadians believe they receive poor or very poor value from the services they receive.
Moreover, living standards have only improved marginally in Canada since 2015. Gross Domestic Product (GDP) per person — a broad measure of living standards — has grown by a meagre 5.1% (inflation-adjusted) over the last eight years. By comparison, Americans have seen their living standards grow by nearly three times as much over the same timeframe.
To put this into further perspective, total compensation and employment for federal bureaucrats are increasing much faster than living standards for Canadians.
These results are not surprising. Bigger governments are not necessarily better than smaller ones. Empirical economic research suggests economic growth is maximized when government spending ranges between 24% and 32% of the size of the national economy. When government spending exceeds this optimal range, government impedes both economic growth and improvements in living standards. Unfortunately, Canada’s size of government (federal, provincial and local) was far beyond the optimal level at 40.5% of GDP in 2022.
Since 2015, the Trudeau government has added more administrators and managers to the federal public service and significantly increased spending — while failing to help raise the living standards of Canadians. Entrusting bureaucrats to pick winners and losers by subsidizing certain industries instead of others has not been a recipe for economic success. Instead, Ottawa appears to be competing with the private sector for skilled workers and inhibiting the national economy in the process.
Canada needs a leaner and more efficient federal government that focuses only on its core functions. Bigger government hasn’t been good for Canadians. It has only been good for government workers.
Jake Fuss and Grady Munro are fiscal policy analysts at the Fraser Institute
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FUSS AND MUNRO: Trudeau’s bigger government not providing more benefits
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07.02.2024
Over the last eight years, the Trudeau government has expanded the size of the federal public service to ensure it plays a more active role in the Canadian economy. However, there’s little evidence this bigger government has made Canadians better off.
Subscribe now to read the latest news in your city and across Canada.
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According to the Public Service Commission of Canada, the size of the federal public service reached 274,219 employees in 2022/23 — an increase of 40.4% since 2014/15. According to data from the Parliamentary Budget Officer, total compensation for federal bureaucrats (adjusted for inflation) increased by nearly 37% between 2015/16 and 2021/22.
This is occurring even as government workers in Canada already enjoy a substantial wage and benefit premium compared to comparable workers in the private sector. According to a recent study published by the Fraser Institute, in 2021 (the latest year of comparable data) government workers at........
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