Fraser Institute News Release: Size of government on the rise across Canada

VANCOUVER, British Columbia, March 26, 2024 (GLOBE NEWSWIRE) -- The combined size of the federal, provincial, and municipal governments increased in all but two provinces over the 2007 to 2022 period (relative to the sizes of their economies), finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“The size of government increased in eight of ten provinces and the country as a whole over the last decade-and-a-half,” said Alex Whalen, associate director at the Fraser Institute and co-author of The Size of Government in Canada in 2022.

The study measures federal, provincial, and local government spending in each province as a share of the economy (GDP) from 2007 to 2022, the most recent year of comparable data.

It finds that government size grew in every province except Prince Edward Island and Saskatchewan during that period. In 2022, the size of government relative to the economy as a whole across Canada ranged from a low of 26.8 per cent in Alberta to a high of 63 per cent in Nova Scotia, and was 40.5 of Canada’s total economy.

Previous research has shown that the size of government (as a share of the economy) to maximize economic growth and social progress is between 26 and 30 per cent of the economy (GDP). When governments exceed that size, it imposes negative effects on the economy, such as crowding out private sector investment, but without providing proportionate benefits such as greater social progress.

“It’s important to understand just how much governments across Canada have grown in recent years, and what impact that might have on our economy moving forward,” said Jake Fuss, director of fiscal policy at the Fraser Institute and co-author.

*Total Consolidated Government Spending as a Percentage of GDP*
*Province* *2007* *2022*   Newfoundland and Labrador 38.7% 44.1%   Prince Edward Island 61.6% 58.3%   Nova Scotia 56.9% 63.0%   New Brunswick 52.7% 57.6%   Quebec 47.4% 49.8%   Ontario 35.8% 40.1%   Manitoba 45.0% 49.4%   Saskatchewan 37.7% 32.8%   Alberta 22.4% 26.8%   British Columbia 34.8% 35.6%          

*MEDIA CONTACT*:

Alex Whalen, Associate Director, Atlantic Canada Prosperity Initiative
Fraser Institute

Jake Fuss, Director, Fiscal Studies
Fraser Institute

To arrange media interviews or for more information, please contact:
Drue MacPherson, Fraser Institute, (604) 688-0221 Ext. 721
drue.macpherson@fraserinstitute.org

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, 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