Topping-up government wages costs taxpayers $20B per year: CFIB

Federal, provincial or municipal employees make up to 37% more than someone doing the same job in the private sector.

March 23, 2015   by PLANT Staff

TORONTO — If you work in the private sector, you’re making up to $8,150 less per year, and working up to six hours more each week, than someone doing the same job for the government.

This is one of several key findings from the Canadian Federation of Independent Business’ latest Wage Watch report, pointing to a huge wage and benefits advantage for public sector workers over the rest of us.

When salaries, benefits and working hours are factored in, the average federal, provincial or municipal employee makes between 18 to 37% more than someone doing the same job in a private business.

The report finds that Canada Post workers and federal government employees are the biggest beneficiaries.


The report compares private sector employees to those at various government employers, and offers clear solutions to close the earnings gap between these workers, such as capping taxpayer-funded contributions to government pensions.

If government workers were paid at the same rate as their private sector equivalents, taxpayers would save $20 billion each year.

“The public-private wage gap is the elephant in every room when it comes to setting the public policy agenda in this country,” said Ted Mallett, chief economist and vice-president at CFIB. “Public sector earnings have been allowed to drift well above market-tested norms, and cash-strapped governments are looking for ways to invest in infrastructure and other priorities. Closing the gap is not just what’s fair, it’s what is needed.”

Based chiefly on National Household Survey (NHS) returns from 2011, the findings represent average full-time employment earnings for more than 7.2 million Canadians. Occupations that don’t exist in both sectors are excluded.

“Canadians in the private sector see their tax dollars paying for government wages and benefits that they can only dream of,” adds Mallett. “Policymakers need to start reigning in these misaligned costs.”

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members.

Find the full report here.

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