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Federal government increased number of public service employees by more than 40%

Published

1 year ago

4 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

“the size of the federal public service reached 274,219 employees in 2022/23—an increase of 40.4 per cent since 2014/15”

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 that this bigger government has made Canadians better off.

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 per cent since 2014/15. And according to data from the Parliamentary Budget Officer, total compensation for federal bureaucrats (adjusted for inflation) increased by nearly 37 per cent 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 per cent 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.)

But higher compensation and an 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 that only 16 per cent 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 per cent) of Canadians believed 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 per cent (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 that economic growth is maximized when government spending ranges between 24 per cent and 32 per cent 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 per cent 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’s only been good for government workers.

Authors:

Jake Fuss
Director, Fiscal Studies, Fraser Institute
Grady Munro
Policy Analyst, Fraser Institute

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Business

Worst kept secret—red tape strangling Canada’s economy

Published on February 22, 2025

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From the Fraser Institute

By Matthew Lau

In the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S.

According to a new Statistics Canada report, government regulation has grown over the years and it’s hurting Canada’s economy. The report, which uses a regulatory burden measure devised by KPMG and Transport Canada, shows government regulatory requirements increased 2.1 per cent annually from 2006 to 2021, with the effect of reducing the business sector’s GDP, employment, labour productivity and investment.

Specifically, the growth in regulation over these years cut business-sector investment by an estimated nine per cent and “reduced business start-ups and business dynamism,” cut GDP in the business sector by 1.7 percentage points, cut employment growth by 1.3 percentage points, and labour productivity by 0.4 percentage points.

While the report only covered regulatory growth through 2021, in the past four years an avalanche of new regulations has made the already existing problem of overregulation worse.

The Trudeau government in particular has intensified its regulatory assault on the extraction sector with a greenhouse gas emissions cap, new fuel regulations and new methane emissions regulations. In the last few years, federal diktats and expansions of bureaucratic control have swept the auto industry, child care, supermarkets and many other sectors.

Again, the negative results are evident. Over the past nine years, Canada’s cumulative real growth in per-person GDP (an indicator of incomes and living standards) has been a paltry 1.7 per cent and trending downward, compared to 18.6 per cent and trending upward in the United States. Put differently, if the Canadian economy had tracked with the U.S. economy over the past nine years, average incomes in Canada would be much higher today.

Also in the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S., and only about two-thirds as much new capital (on average) as workers in other developed countries.

Consequently, Canada is mired in an economic growth crisis—a fact that even the Trudeau government does not deny. “We have more work to do,” said Anita Anand, then-president of the Treasury Board, last August, “to examine the causes of low productivity levels.” The Statistics Canada report, if nothing else, confirms what economists and the business community already knew—the regulatory burden is much of the problem.

Of course, regulation is not the only factor hurting Canada’s economy. Higher federal carbon taxes, higher payroll taxes and higher top marginal income tax rates are also weakening Canada’s productivity, GDP, business investment and entrepreneurship.

Finally, while the Statistics Canada report shows significant economic costs of regulation, the authors note that their estimate of the effect of regulatory accumulation on GDP is “much smaller” than the effect estimated in an American study published several years ago in the Review of Economic Dynamics. In other words, the negative effects of regulation in Canada may be even higher than StatsCan suggests.

Whether Statistics Canada has underestimated the economic costs of regulation or not, one thing is clear: reducing regulation and reversing the policy course of recent years would help get Canada out of its current economic rut. The country is effectively in a recession even if, as a result of rapid population growth fuelled by record levels of immigration, the GDP statistics do not meet the technical definition of a recession.

With dismal GDP and business investment numbers, a turnaround—both in policy and outcomes—can’t come quickly enough for Canadians.

Matthew Lau

Adjunct Scholar, Fraser Institute
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Business

‘Out and out fraud’: DOGE questions $2 billion Biden grant to left-wing ‘green energy’ nonprofit`

Published on February 22, 2025

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From LifeSiteNews

By Calvin Freiburger

The EPA under the Biden administration awarded $2 billion to a ‘green energy’ group that appears to have been little more than a means to enrich left-wing activists.

The U.S. Environmental Protection Agency (EPA) under the Biden administration awarded $2 billion to a “green energy” nonprofit that appears to have been little more than a means to enrich left-wing activists such as former Democratic candidate Stacey Abrams.

Founded in 2023 as a coalition of nonprofits, corporations, unions, municipalities, and other groups, Power Forward Communities (PFC) bills itself as “the first national program to finance home energy efficiency upgrades at scale, saving Americans thousands of dollars on their utility bills every year.” It says it “will help homeowners, developers, and renters swap outdated, inefficient appliances with more efficient and modernized options, saving money for years ahead and ensuring our kids can grow up with cleaner, pollutant-free air.”

The organization’s website boasts more than 300 member organizations across 46 states but does not detail actual activities. It does have job postings for three open positions and a form for people to sign up for more information.

The Washington Free Beacon reported that the Trump administration’s Department of Government Efficiency (DOGE) project, along with new EPA administrator Lee Zeldin, are raising questions about the $2 billion grant PFC received from the Biden EPA’s National Clean Investment Fund (NCIF), ostensibly for the “affordable decarbonization of homes and apartments throughout the country, with a particular focus on low-income and disadvantaged communities.”

PFC’s announcement of the grant is the organization’s only press release to date and is alarming given that the organization had somehow reported only $100 in revenue at the end of 2023.

“I made a commitment to members of Congress and to the American people to be a good steward of tax dollars and I’ve wasted no time in keeping my word,” Zeldin said. “When we learned about the Biden administration’s scheme to quickly park $20 billion outside the agency, we suspected that some organizations were created out of thin air just to take advantage of this.” Zeldin previously announced the Biden EPA had deposited the $20 billion in a Citibank account, apparently to make it harder for the next administration to retrieve and review it.

“As we continue to learn more about where some of this money went, it is even more apparent how far-reaching and widely accepted this waste and abuse has been,” he added. “It’s extremely concerning that an organization that reported just $100 in revenue in 2023 was chosen to receive $2 billion. That’s 20 million times the organization’s reported revenue.”

Daniel Turner, executive director of energy advocacy group Power the Future, told the Beacon that in his opinion “for an organization that has no experience in this, that was literally just established, and had $100 in the bank to receive a $2 billion grant — it doesn’t just fly in the face of common sense, it’s out and out fraud.”

Prominent among PFC’s insiders is Abrams, the former Georgia House minority leader best known for persistent false claims about having the state’s gubernatorial election stolen from her in 2018. Abrams founded two of PFC’s partner organizations (Southern Economic Advancement Project and Fair Count) and serves as lead counsel for a third group (Rewiring America) in the coalition. A longtime advocate of left-wing environmental policies, Abrams is also a member of the national advisory board for advocacy group Climate Power.

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