Report shows wide divide between public, private sector perks

Government employees enjoy better pay, pensions, sick time

BY Jim Wilson 25 Jan. 2023

Public sector workers in Ontario – whether federal, provincial or local – enjoy wages that are, on average, 34.4 per cent higher than in the private sector, reports the Fraser Institute.

Even factoring in gender, age, level of education, tenure, type of employment (seasonal, contractual), part-time or full-time work, establishment size, immigrant status, industry and occupation, those in the public sector still earn, on average, 10.9 per cent more than their private sector counterparts.

And even if unionization is included, public workers out-earn private employees by 8.8 per cent.

That should change, according to Ben Eisen, a senior fellow with the Fraser Institute.

“At a time when governments are facing serious fiscal pressures, bringing government sector compensation in line with the private sector would help reduce costs without necessarily affecting services,” says

The union representing workers at the Canada Revenue Agency’s financial, audit and scientific unit has criticized the federal government for a “number of demands to reduce pay” for employees working from home.

About 1.5 million Ontarian workers, 19.8 per cent of total employment, were employed in the public sector in 2021. Meanwhile, the private sector had 4.8 million workers, representing 65.3 per cent of total employment, according to Statistics Canada.

Better benefits

The story of public workers being better off compared with private workers does not end there, according to the Frasier Institute report Comparing Government and Private Sector Compensation in Ontario, 2023 Edition:

83.9 per cent of government workers in Ontario are covered by a registered pension plan, compared to 25.1 per cent of private-sector workers
Of those covered by a registered pension plan, 94.5 per cent of government workers enjoy a defined-benefit pension compared to 36.9 per cent of private-sector workers.
Government workers in Ontario retire about 2.5 years earlier, on average, than their private-sector counterparts.
In 2021, full-time workers in the government sector were absent from their jobs for personal reasons more on average (14 days) than private sector workers (8.8 days).
In 2021, 5.5 per cent of private sector employees experienced job loss in Ontario, compared to 1.3 per cent of government workers.

“It’s important that all levels of government in Canada – municipal, provincial and federal – continuously review expenditures with an eye to producing better value-for-money to taxpayers,” Eisen says.

“Closing the compensation gap in Ontario between the government and private sectors would reduce costs and can help ensure the long-term sustainability of government finances.”