Government workers across Canada earned 4.8 per cent more in wages, on average, than comparable private-sector employees in 2024, according to a new study from the Fraser Institute.
The report, titled Comparing Government and Private Sector Compensation in Canada, 2025 Edition, was released recently by the Vancouver-based think-tank. It found that federal, provincial and municipal government employees received 26.1 per cent higher wages, on average, than private-sector workers before accounting for factors such as age, gender, education, tenure, type of work, industry and occupation.
After adjusting for those factors, the wage gap narrowed to 4.8 per cent.
Jake Fuss
“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.
The study also compared non-wage benefits and found public-sector workers receive significantly more generous compensation overall.
In 2024, 86.7 per cent of public-sector employees were covered by a registered pension plan, compared to 21.8 per cent in the private sector. Among those with pension coverage, 91.5 per cent of government workers had defined-benefit plans, which offer guaranteed retirement income, while 40.7 per cent of private-sector workers had the same.
Public-sector employees also retired 2.2 years earlier, on average, than private-sector workers. They took more personal leave—15.7 days compared to 9.3 days—and were about five times less likely to lose their jobs, with a job loss rate of 0.6 per cent versus 3.2 per cent in the private sector.
“All levels of government in Canada—municipal, provincial and federal—must find ways to reduce costs as spending and borrowing have continued to ramp up across the country,” Fuss said.
“Closing the compensation gap between the government and private sectors would reduce costs and help governments move towards balancing their budgets.”
The Fraser Institute describes itself as an independent, non-partisan public policy research and educational organization. It says it does not accept government funding or contracts for research.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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