Buried among the many tables in Statistics Canada’s June employment report are data on public sector employment: federal, provincial and local employees hired by departments, agencies,
hospitals and schools, including universities and colleges. As of June, 4.412 million workers were public employees, representing 21.5 per cent of Canada’s workforce. That is an astonishing
972,000 more (28.3 per cent) than in 2014, when 3.439 million Canadians were working for governments. And the numbers don’t include contracted services.
Over this period Canada’s population rose 12.2 per cent. Why public sector employment had to grow at more than twice that rate is hard to understand. The effect of such feverish growth is
clear, however: it has pushed up wage rates and likely would have done so even if three-quarters of public sector workers weren’t unionized. Private employment, including self-employment,
has risen only 12.4 per cent since 2014 — almost the same rate as population growth. If it weren’t for immigration, private employers would be desperate for workers and would have had to
forgo production.
All governments in Canada are expanding their workforces, but the most rapid growth is in the federal government. From 2014 through last year, the non-military federal civil service grew from
257,138 to 357,247. That is an astounding 38.9 per cent, more than three times the rate of growth of population.
This rapid expansion in the federal labour force has weighed heavily on the federal budget. In 2023, the federal government spent $50.8 billion on non-military wages and salaries, at an average
cost of $142,600 per person (including CPP, EI and other social contributions). If the growth of federal bureaucracy had instead matched Canada’s population growth, we would now have 69,000
fewer federal employees. That would have saved taxpayers $10 billion in 2023, enabling federal personal income taxes to be cut by $1,000 per family of four.
Taxpayers need to question whether every new government intervention in the economy generates net benefits to society. Too often what Oscar Wilde once remarked seems to be true: “The
bureaucracy is expanding to meet the needs of an expanding bureaucracy.” Much of what the federal government does merely takes money from some Canadians and gives it to others — which
sounds like its effect might be “net-zero” except that raising and spending the money both involve economic and administrative costs. The ultimate effect of many of these activities is therefore
very likely net-negative.
With so many bureaucrats milling about, decisions slow down as files are passed from one to another. Accountability is lost. Departments point fingers at each other, as we have seen in the ArrriveCan
debacle. New programs are hatched and more employees hired whether they are needed or not. With work-from-home, less gets done as unsupervised employees walk the dog or do the shopping.
With labour productivity flat or falling, getting tasks done requires hiring more and more workers.
