Business
Job growth in government exceeded the private sector in 8 out of 10 provinces from 2019-23
From the Fraser Institute
By Ben Eisen and Milagros Palacios
In eight of 10 provinces the rate of government job growth has been higher than the private sector, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Canada’s net job creation in recent years has been disproportionately driven by growth in government employment rather than growth in the private sector, and as of 2019, government employment as a share of total employment in the country is at its highest point since the mid-1990s,” said Ben Eisen, Fraser Institute senior fellow and co-author of Economic Recovery in Canada before and after COVID: Job Growth in the Government and Private Sectors.
The study finds that historically, no other recent era of recession and recovery in Canada have been so dominated by government sector job growth compared to private sector job growth.
During the recession and recovery periods related to the COVID-19 recession (2019-2023), government employment across the country, including federal, provincial and municipal increased by 13.0 per cent compared to just 3.6 per cent in the private sector (including self-employment.)
In every Canadian province save for Alberta and Nova Scotia, employment in the government sector expanded at a higher rate than the private sector. In BC, employment growth in the private sector (including self-employment) rose only by 0.5 per cent during the period compared to 22.0 per cent in the government sector. Ontario’s public sector experienced triple the growth the private sector had, with 14.6 per cent and 4.8 per cent, respectively.
The study also compares the current recession and recovery in Canada to the United States, where the private sector has generated a large majority of all new jobs in recent years. In Canada, the government sector is responsible for 46.7 per cent of total job growth from 2019-203 compared to 16.1 per cent in the United States.
“Canada has seen a much higher rate of job growth in the government sector than the private sector in recent years, which is a concerning trend given that job growth and wealth creation in the private sector are needed to finance the activities of governments,” said Eisen.
- Several past analyses published by the Fraser Institute have shown that in recent years net job creation in the government sector has dramatically outstripped private-sector job creation.
- This publication updates these data, showing that during the recession brought on by the COVID-19 pandemic and the following recovery (2019–2023), government employment has increased by 13.0% while employment in the private sector (including self-employment) increased just 3.6%
- We further expand past analysis by comparing the ongoing recovery from the COVID-19 recession to past periods of economic recession and recovery.
- We find that the extent to which the current economic recovery is driven by government job growth is historically unusual. We compare the current economic environment to five past economic recessions and slowdowns and find that none of those recoveries were nearly as reliant on job creation in the government sector.
- We also compare the current recession and recovery in Canada to that in the United States, which differs sharply. In the United States, the private sector has generated a large majority of all new jobs in recent years and the rate of net job creation in the private sector has been nearly identical to that in the government sector.
- As a result of disproportionately faster growth in the public-sector employment, government’s share of employment post-COVID is higher than at any point since the fiscal consolidations of the 1990s.
Authors:
Artificial Intelligence
OpenAI and Microsoft negotiations require definition of “artificial general intelligence”
From The Deep View
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OpenAI’s bargaining chip
| A couple of relatively significant stories broke late last week concerning the — seemingly tenuous — partnership between OpenAI and Microsoft. | |
| The background: OpenAI first turned to Microsoft back in 2019, after the startup lost access to Elon Musk’s billions. Microsoft — which has now sunk more than $13 billion into the ChatGPT-maker — has developed a partnership with OpenAI, where Microsoft provides the compute (and the money) and OpenAI gives Microsoft access to its generative technology. OpenAI’s tech, for instance, powers Microsoft’s Copilot. | |
| According to the New York Times, OpenAI CEO Sam Altman last year asked Microsoft for more cash. But Microsoft, concerned about the highly publicized boardroom drama that was rocking the startup, declined. | |
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| Microsoft, meanwhile, has been expanding its portfolio of AI startups, recently bringing the bulk of the Inflection team on board in a $650 million deal. | |
| Now, the terms of OpenAI’s latest funding round were somewhat unusual. The investment was predicated on an assurance that OpenAI would transition into a fully for-profit corporation. If the company has not done so within two years, investors can ask for their money back. | |
| According to the Wall Street Journal, an element of the ongoing negotiation between OpenAI and Microsoft has to do with this restructuring, specifically, how Microsoft’s $14 billion investment will transfer into equity in the soon-to-be for-profit company. | |
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| Here’s where things get really interesting: OpenAI isn’t a normal company. It’s mission is to build a hypothetical artificial general intelligence, a theoretical technology that is pointedly lacking in any sort of universal definition. The general idea here is that it would possess, at least, human-adjacent cognitive capabilities; some researchers don’t think it’ll ever be possible. | |
| There’s a clause in OpenAI’s contract with Microsoft that if OpenAI achieves AGI, Microsoft gets cut off. OpenAI’s “board determines when we’ve attained AGI. Again, by AGI we mean a highly autonomous system that outperforms humans at most economically valuable work. Such a system is excluded from IP licenses and other commercial terms with Microsoft, which only apply to pre-AGI technology.” | |
| To quote from the Times: “the clause was meant to ensure that a company like Microsoft did not misuse this machine of the future, but today, OpenAI executives see it as a path to a better contract, according to a person familiar with the company’s negotiations.” | |
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| This is a good example of why the context behind definitions matters so much when discussing anything in this field. There is a definitional problem throughout the field of AI. Many researchers dislike the term “AI” itself; it’s a misnomer — we don’t have an actual artificial intelligence. | |
| The term “intelligence,” is itself vague and open to the interpretation of the developer in question. | |
| And the term “AGI” is as formless as it gets. Unlike physics, for example, where gravity is a known, hard, agreed-upon concept, AGI is theoretical, hypothetical science; further, it is a theory that is bounded by resource limitations and massive limitations in understanding around human cognition, sentience, consciousness and intelligence, and how these all fit together physically. | |
| This doesn’t erase the fact that the labs are trying hard to get there. | |
| But what this environment could allow for is a misplaced, contextually unstable definition of AGI that OpenAI pens as a ticket either out from under Microsoft’s thumb, or as a means of negotiating the contract of Sam Altman’s dreams. | |
| In other words, OpenAI saying it has achieved AGI, doesn’t mean that it has. | |
| As Thomas G. Dietterich, Distinguished Professor Emeritus at Oregon State University said: “I always suspected that the road to achieve AGI was through redefining it.” |
Alberta
Alberta investors now have more options for securing cryptocurrency and other digital assets.
Bringing balance to Alberta’s financial system
Balance Trust Company has officially been registered as an Alberta-based trust corporation under the Loan and Trust Corporations Act.
On Oct. 17, Alberta’s government issued the company its certificate of registration, enabling it to offer cryptocurrency and other digital asset custodial services to investors in Alberta and other authorized jurisdictions.
“We are proud to support innovative companies like Balance Trust Company. With its registration, Alberta strengthens its position as a leader in the finance and financial technology sector. Our commitment to the sector’s growth keeps us at the forefront of financial innovation, boosts our economy and provides greater security for investors.”
Balance Trust Company leveraged Alberta’s financial services concierge, a service designed to guide financial services and fintech companies through the province’s regulatory landscape. Alberta’s government established the financial services concierge and regulatory sandbox to help companies set up shop in Alberta.
With Canada’s digital asset market continuing to grow, the presence of more licensed custodians reduces Canadian investors’ reliance on foreign entities, enhancing compliance and control over their investments. Balance Trust Company’s presence in Alberta will promote healthy competition, attract further investment and reinforce the province’s reputation as a hub for financial innovation.
“Since 2021, public fund managers and restricted dealers have sent more than $5 billion worth of investor assets to the U.S. due to the lack of local custodians. It’s time to bring them back, and I can’t think of a better home for those assets than Alberta. We’re grateful to Minister Horner and the entire team at the Alberta Treasury Board and Finance for recognizing the criticality of this task and for enabling us to bring this much-needed infrastructure to our local ecosystem.”
Quick facts
- Balance Trust Company is a subsidiary of Balance, Canada’s oldest and largest digital asset custodian.
- Balance Trust Company is Alberta’s second registered digital asset custodian, after Tetra Trust which was registered in 2021.
- Balance Trust Company is the only custodian with a proprietary technology platform developed entirely in-house through more than seven years of continuous research and development.
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