Canadian study shows generous rewards when it comes to pay, pensions, vacations and job security
Government employees across Canada working in federal, provincial and municipal sectors, are being paid considerably higher wages than private sector workers.
A study by the Fraser Institute found that the chasm between the two types of workers was 31.3 per cent, on average, in 2021, according to the most recent data from Statistics Canada’s Labour Force Survey.
“At a time when governments across Canada are facing serious fiscal pressures as a result of the recession, bringing government sector compensation in line with the private sector would help reduce costs without necessarily affecting services,” says Ben Eisen, a senior fellow with the Fraser Institute in Toronto.
The report shows that the gap remains even after adjusting for differences such as age, gender, education, tenure, type of work, industry and occupation, and government employees are still paid 8.5 per cent higher wages over their private sector counterparts.
General total rewards
Besides having more generous pay cheques, the study looked at other areas of total rewards and gaps there too.
As an example, 86.6 per cent of government workers are covered by a registered pension plan compared to 22.9 per cent of private-sector workers. Of those covered by a registered pension plan, 90.6 per cent of government workers enjoyed a DB pension compared to 39.9 per cent for private-sector workers.
Those workers also tended to take quicker advantage of generous pensions, found the report as they retired 2.4 years earlier, on average.
Government workers also took more time off for personal reasons per year: 14.9 days each year on average versus private-sector employees, who averaged 9.8 days off in 2021.
And public sector employees are much less likely to lose their positions: one per cent in the public sector left employment, compared to 4.8 per cent in the private sector, according to the Fraser Institute.
This week, more than 155,000 government workers are expected to walk off their jobs, if a settlement isn’t reached for PSAC employees working at the CRA and the Treasury Board.
“All levels of government in Canada, municipal, provincial and federal, must find ways to reduce costs following the unprecedented spending and borrowing we’ve seen recently. Closing the compensation gap between the government and private sectors would reduce costs and help governments move towards balancing their budgets,” says Eisen.
