Report highlights gaps in compensation, pension coverage, leave frequency
Government workers in Ontario and British Columbia earned significantly higher wages and enjoyed more generous benefits than comparable private‑sector employees in 2024, according to two new studies from the Fraser Institute.
In Ontario, government employees were paid 7.9 per cent higher wages, on average, than private‑sector workers in 2024. In B.C., the wage gap was 4.4 per cent.
The Fraser Institute notes that these differences persist even when accounting for unionization. In Ontario, “even after adjusting for unionization status, government employees are still paid 6.5 per cent higher wages.” In B.C., “even after adjusting for unionization status, government employees are still paid 2.8 per cent higher wages.”
The reports, Comparing Government and Private Sector Compensation in Ontario and Comparing Government and Private Sector Compensation in B.C., use Statistics Canada’s Labour Force Survey to compare federal, provincial and municipal government employees with private‑sector workers.
Organised labour in Alberta seems to be putting financial pressure on employers, as unionized workers are gaining pay increases unseen from non-unionized employees, according to a previous report.
Fiscal challenges
The Fraser Institute studies also tie compensation to provincial fiscal challenges. “With the Ontario government projecting a deficit of over $13 billion this year, bringing government sector compensation in line with the private sector would help reduce costs without necessarily disrupting services,” said Jake Fuss, director of fiscal studies at the Fraser Institute. In B.C., he offered a similar assessment:
The same is true for the B.C. government, which is projecting a deficit of over $11 billion this year, he said.
The public sector keeps wage growth high in Canada, according to a previous report.
Pensions and retirement patterns
The Fraser Institute reports a pronounced divide in pension coverage and design. Nationally in 2024, 84.3 per cent of public‑sector workers were covered by a registered pension plan compared to 15.9 per cent in the private sector. Of those covered, “almost all government workers (93.9 per cent) enjoyed defined‑benefit pensions, which offer a guaranteed level of income and benefits in retirement, compared to 41.8 per cent among private sector workers.”
In Ontario, 82.7 per cent of public‑sector workers were covered by a registered pension plan compared to 23.6 per cent in the private sector. Among those with coverage, “almost all government workers (94.8 per cent) enjoyed defined‑benefit pensions… compared to 37.8 per cent among private sector workers.”
Meanwhile, 84.3 per cent of government workers in B.C. are covered by a registered pension plan, compared to 15.9 per cent of private‑sector workers. Of those covered, 93.9 per cent of government workers have a defined‑benefit pension, compared to about 41.8 per cent of private‑sector workers.
The reports also show earlier retirement among public‑sector workers. Across Canada, “public‑sector workers retired 1.4 years earlier, on average, than the country’s private‑sector workers.” In Ontario, “public‑sector workers retired 2.2 years earlier, on average, than the province’s private‑sector workers.” Government workers in B.C. retire about 1.4 years earlier on average than their private‑sector counterparts.
Recently, federal departments started notifying public servants that their positions may be affected as Ottawa moves ahead with plans to cut thousands of jobs over the next four years. Statistics Canada, for one, is set to shed 850 positions.
Leave, job security and workforce management
The Fraser Institute also identifies notable differences in personal leave. Nationally, “government workers were absent from their jobs for personal reasons more often than private sector workers—15.8 days compared to 10.4 days.” In Ontario, “government workers were absent from their jobs for personal reasons more often than private sector workers—14.4 days compared to 8.2 days.” Full‑time government workers in B.C. lost more work time for personal reasons in 2024—15.8 days on average—than private‑sector workers, who lost 10.2 days.
Job security is another area of divergence. In 2024, “public‑sector employees were approximately seven times less likely to experience job loss than private‑sector workers—0.4 per cent compared to 2.9 per cent” across Canada. In Ontario, public‑sector employees were “nearly six times less likely to experience job loss than private‑sector workers—0.6 per cent compared to 3.5 per cent.”
Also, government workers in B.C. are “much less likely to lose their jobs” than private‑sector workers. In summarizing the 2024 data, the Fraser Institute notes substantially lower job‑loss rates in the public sector, consistent with the national pattern where public‑sector employees faced a 0.4 per cent job‑loss rate versus 2.9 per cent in the private sector.
The Fraser Institute argues that governments must act on the observed gaps. “All levels of government in Ontario—municipal, provincial and federal—must find ways to reduce costs as spending and borrowing have continued to ramp up,” Fuss said. A similar message is directed at B.C.
The think‑tank concludes that “closing the compensation gap between the government and private sectors would reduce costs and help governments move towards balancing their budgets.”
The number of federal public servants earning more than $150,000 a year has surged over the past five years, according to a previous report from the Treasury Board of Canada Secretariat (TBS).
