Government workers across Canada received wages 4.8 per cent higher on average than comparable private-sector workers in 2024 after adjusting for factors including age, education and occupation, according to a new Fraser Institute study.
Before adjustments, government employees at federal, provincial and municipal levels were paid 26.1 per cent higher wages on average than private-sector workers, according to the study released Thursday. The analysis used data from Statistics Canada’s Labour Force Survey.
The study, titled “Comparing Government and Private Sector Compensation in Canada, 2025 Edition,” examined wage differences after controlling for age, gender, education, tenure, type of work, industry and occupation.
Pension coverage gaps between sectors
In 2024, 86.7 per cent of public-sector workers were covered by a registered pension plan compared to 21.8 per cent in the private sector, according to the study. Among those with pension coverage, 91.5 per cent of government workers had defined-benefit pensions, which guarantee income and benefits in retirement, compared to 40.7 per cent of private-sector workers, the study found.
Public-sector workers retired 2.2 years earlier on average than private-sector workers, according to the Fraser Institute.
Sick leave and job security differences
Government workers were absent from their jobs for personal reasons 15.7 days on average compared to 9.3 days for private-sector workers.
In 2024, public-sector employees were approximately five times less likely to experience job loss than private-sector workers, with 0.6 per cent of government workers losing jobs compared to 3.2 per cent in the private sector, according to the study.
“At a time when governments across Canada are facing immense fiscal pressures, 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.
Fiscal implications cited
The Fraser Institute said closing the compensation gap would help governments reduce costs and move toward balanced budgets. Fuss said all levels of government must find ways to reduce costs as spending and borrowing have increased across the country.
The Fraser Institute is an independent public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Halifax and Montreal.
