When we think of government employment and operations, we tend to think of employees working away in government offices — i.e. some huge hidden bureaucracy. Back in June 2015, the Fraser Institute released a report which noted that the public sector share of employment starting in 1992, declined from 26.1 percent to 22.3 percent by 2003. Subsequently, it also noted that there had been an increase, with a peak of 24.4 percent reached in 2010 and then a slight decline to 24.1 percent by 2013. As a result, persons looking at the report would immediately use such information to highlight that one out of four jobs in Canada are in government at different levels: federal, provincial and local. The fact of the matter is that this perception is somewhat misleading depending on which definition of public sector activity one is using. They then allude to U.S. stats which suggest that one in eight jobs is in the public sector. This comparison is misleading given the differences in public sector definitions between the two countries and the various activities which employ greater private sector resources in the U.S., such as in higher education and health care.
In Canada, besides public administration, public sector entities are found in the form of numerous government business enterprises (GBEs), active in various industries such as utilities (e.g., hydroelectricity), retail trade (e.g., liquor boards and cannabis stores), transportation (e.g., ports), finance (e.g., deposit insurance), leasing (e.g., convention centres) and recreation (e.g., nature parks). For example, because of universal health care and health insurance in Canada, the vast majority of medical services are publicly funded, and health practitioners are deemed to be part of the public sector. In addition, colleges and universities are primarily publicly funded.
Subsequently, the large size of the general government in Canada is primarily because of extensive social protection programs combined with the universal health care and public education systems. In 2022, Statistics Canada reported that the expenses in 2021 of the 6,135 public sector units (as defined by the agency) amounted to 48.6% of the total gross domestic product (GDP), with consolidated general government expenses alone representing 44.9% of GDP. These stats would place Canada’s public sector share of the economy in the same allocation as countries such as Great Britain, Sweden and Norway for example.
There is no doubt that the nature and range of industries in which the public sector is involved underlines its economic breadth and influence in Canada. The public sector represents many workers who provide valuable services to Canadians, including health workers, teachers, firefighters, paramedics, hydro workers, park wardens, police officers, inspectorates, public transit workers, etc., etc. As one can see, many public sector workers are employed in what are deemed as essential services. To maintain these services, there has to be an adequate number of experienced and qualified public sector workers. Wages and benefits have to be competitive with those offered in the private sector in order to attract and retain skilled workers, especially in the current period of labour shortages.
On the one hand, the Fraser Institute is known to be a pro-business entity and tends to take a more anti-government stance in its research and analysis. On the other hand, in the most recent report released by Statistics Canada in 2021, it noted that public sector expenses (48.6% of GDP) saw a significant reduction from their unprecedented high levels reported in 2020 (58.8% of GDP). Governments at all levels are attempting to reduce their annual debt levels, back to levels found prior to the pandemic. It can be anticipated that public sector employment is most likely going to decline in post-pandemic years, particularly with the reduced need for certain services and programs introduced by governments during the pandemic.
To imply that public sector employment in Canada is somehow out of whack, is to ignore the importance of the role of governments in the country at all levels. Given the scope of the Canadian public sector, the numbers are entirely reasonable and acceptable.
FROLITICKS 
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