Canada's Government Sector Reaches Record Size Amid Economic Concerns

Canada's government sector has grown significantly in recent years, with 21.5% of employed Canadians working for the government as of 2024, up from 19.6% in 2019. This growth is not solely due to the pandemic, but rather a result of choices made by governments after the crisis.

The total government spending as a share of Canada's economy has also increased, reaching 43.6% in 2024 compared to 40.3% in 2019. Economists suggest that an ideal size for government spending is between 24 and 32% of a jurisdiction's economy, which Canada currently exceeds.

The Fraser Institute warns that large governments come with significant costs, including reduced economic growth and higher taxes on private sector workers. If the Carney government were to reduce the size of the government sector, it would require tough decisions about the number of employees and departments.