VANCOUVER, BC, Oct. 2, 2025 /CNW/ – Government workers on average enjoy a higher wage premium and more generous benefits in Canada than their private-sector counterparts, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“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, Comparing Government and Private Sector Compensation in Canada, 2025 Edition, finds that government employees across Canada—including federal, provincial and municipal workers—were paid 26.1 per cent higher wages, on average, than workers in the private sector in 2024, the most recent year of available comparable data from Statistics Canada’s Labour Force Survey.
Even after adjusting for differences such as age, gender, education, tenure, type of work, industry, and occupation, government employees are still paid 4.8 per cent higher wages.
But wages are only part of overall compensation. Government workers across Canada enjoy much more generous non-wage benefits, too, such as:
- Pensions: In 2024, 86.7 per cent of public-sector workers were covered by a registered pension plan compared to only 21.8 per cent in the private sector. Of those covered, almost all government workers (91.5 per cent) enjoyed defined-benefit pensions, which offer a guaranteed level of income and benefits in retirement, compared to 40.7 per cent among private sector workers.
- Early retirement: Public-sector workers retired 2.2 years earlier, on average, than the country’s private-sector workers.
- Personal leave: Government workers were absent from their jobs for personal reasons more often than private sector workers—15.7 days compared to 9.3 days.
- Job security: In 2024, public-sector employees were approximately five times less likely to experience job loss than private-sector workers—0.6 per cent compared to 3.2 per cent.
“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.”
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Halifax and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org
SOURCE The Fraser Institute
