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By Leah Bjornson,
Special to The Post

Growth in Canada’s public sector employment has far outpaced that of the private sector over the last ten years, reveals a new study by the Fraser Institute, an independent research and educational organization based in Canada.
The study, which examined employment in both sectors between 2003 and 2013, found that employment in Canada’s public sector increased by 22.6 per cent over the ten years. This is more than double the national rate of growth in private sector employment, which stands at 10.7 per cent.
Such levels of growth have not been seen since the early 1990s, which were typified by large government deficits and debt.
For study author Livio DiMatteo, a Fraser Institute Senior Fellow and Professor of Economics at Lakehead University, these trends may have adverse economic and fiscal implications. “The concern is that while public spending and public employment can stabilise the economy in a downturn in the short run, it could lead to crowding out of private sector activity in the long term once full employment is reached,” he explained.
Crowding out describes a situation where increased public sector growth replaces or drives down private sector growth. With increased employment in the broader public sector — which includes education, health and social service spending — the issue for DiMatteo is that this may ultimately reduce the potential for private sector expansion.
“If your public sector employment is going to grow, you also want robust, private sector employment to accompany it,” he said. “Because in the end, it’s private sector jobs and incomes that pay a lot of the taxes that support the public services that people need.”
DiMatteo argues that this increased government hiring might also affect prices in markets such as wages or interest rates.
During the time observed in the study, Ontario experienced the largest differential in public and private sector employment by far, with 27.6 per cent public sector employment growth as compared to 5.6 per cent in the private. On the other side of the scale, Newfoundland experienced 11.8 per cent public sector employment growth, with its private sector outpacing it by 2.2 per cent.
British Columbia had the third highest differential behind Ontario and Nova Scotia, with 24.3 per cent public sector employment growth. This is 10.3 per cent greater than its private sector employment growth of 14.0 per cent. 
DiMatteo explained that BC’s significant public sector growth may be attributed in part to its growing population. “If your economy is doing relatively well, in the sense of generating tax revenues, you certainly would expect your public sector employment also to be growing somewhat, especially if population is growing.”
He continued, “In the BC case, population has been growing, the economy has been growing, but its public sector employment has still been growing faster than its private sector employment.”