Explosive growth in public administration 'indicative of an excessive regulatory burden,' says expert
Public sector employment in Canada has expanded at dramatically faster rates than private sector job creation over the past decade, creating competitive pressures on employers struggling to recruit and retain talent, according to a recent report.
Specifically, the public sector in Canada added 950,000 jobs between 2015 and 2024, according to the Fraser Institute.
"This accounted for roughly 30% of all employment gains," says Jason Childs, professor of economics at the University of Regina.
During the same period, public sector employment grew at an annual average rate of 2.7% per year, while private sector employment grew at 1.7% per year, he says.
"In all provinces except Manitoba, public sector employment growth outpaced private sector employment growth, exerting increased pressure on government finances."
Canada’s public sector is leading the way when it comes to creating jobs in the past few years, according to a previous Fraser Institute report.
‘Excessive regulatory burden’
One particularly concerning trend for business leaders involves the explosive growth in public administration, according to Childs. The report notes that there were 328,200 more public administrators in 2024 than there were in 2015. This accounts for almost one-third of the growth in Canadian public sector employment, and for 10% of all net new employment.
The growth in bureaucratic positions has implications for private sector employers beyond recruitment. Childs warns that "high levels of employment in government administration can be indicative of an excessive regulatory burden on those who produce goods and services, and ultimately wealth."
"More administrators typically translate into a larger volume of and more vigorously enforced regulations, which in turn can lead to lower private sector productivity growth," he says.
Public administration positions grew at an annual average rate of 3.2% nationally, with the Fraser Institute calculating that "employment in public administration doubling every 22.5 years."
"The trend toward sustained strong public sector employment growth is worrisome given Canada's weak productivity and persistent deficits by both provinces and the federal government," says Childs.
Canadian government-sector employees continue to earn higher wages and enjoy more generous benefits than their private-sector counterparts, according to the Fraser Institute.
Under Budget 2025, the federal public service is set to lose 40,000 jobs.
