Between 2019 and 2023, Canada’s public sector employment grew at more than twice the rate of the private sector, increasing by 13 percent compared to just 5.9 percent. This shift added around half a million public sector jobs, with public administration as the largest contributor, raising the public sector’s share of total employment from 19.7 percent in 2019 to 21.1 percent of Canada’s 20.17-million-strong labour force in 2023.
Provincial data highlights notable trends. Most provinces saw stronger growth in public sector jobs, with Prince Edward Island leading with a substantial 25.5-percent increase in public sector employment – well above its private sector growth of 7.7 percent. In contrast, Alberta and Nova Scotia saw private sector expansion outpace public sector growth, with Alberta’s private sector growing by 9.2 percent compared to a 4.4-percent increase in public sector employment.
Growth in healthcare, social assistance, education and other services as opposed to administrative positions varied widely. For instance, in British Columbia, those health and social services accounted for 79 percent of the increase in public sector jobs. However, in New Brunswick and Newfoundland and Labrador, much of the growth was driven by public administration roles, representing 60 and 71 percent of increase in public sector employment, respectively.
This trend raises concerns about Canada’s overall productivity. Since 2019, public sector productivity has lagged that of the business sector. As public employment continues to make up a larger share of total employment, its lower productivity could weigh on Canada’s overall labour productivity. The rapid expansion of public sector employment, contrasted with slower private sector job creation, may signal challenges for private sector expansion, which is essential for long-term economic growth.
