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Wages higher in Ontario’s public sector than private sector, says Fraser Institute

Recent study by think-tank finds that government employees in Ontario are enjoying higher wages and benefits than their private sector counterparts


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TORONTO—Government employees in Ontario get higher wages, on average, than comparable workers in the private sector, according to a new study by the Fraser Institute, a right-leaning Canadian public policy think-tank.

“Queen’s Park and the federal government, which has a lot of employees in Ontario, are both struggling financially. Scrutinizing public sector compensation would be a good first step to address their fiscal challenges without affecting services,” said Charles Lammam, director of fiscal studies at the Fraser Institute.

The study finds that federal, provincial, and municipal government employees in Ontario received 13.4 per cent higher wages, on average, than comparable workers in the private sector in 2015.

The study also finds that government workers in Ontario enjoy more generous benefits.

  • Pensions: 79.7 per cent of government employees are covered by guaranteed benefits, compared to just 11.4 per cent in the private sector
  • Early retirement: Government employees retire 1.4 years earlier, on average, than the province’s private-sector workers
  • Personal leave: Government employees are absent from their jobs for personal reasons 60 per cent more often than private-sector workers, 10.9 days compared to 6.8 days
  • Job security: Government employees enjoy much more job security, and are six times less likely to experience job loss than private-sector workers, 0.5 per cent compared to 3.2 per cent

“The Ontario government, in particular, is struggling with persistent deficits and soaring debt, and bringing public-sector compensation in line with the private sector would help Queen’s Park better control spending,” said Ben Eisen, director of the Ontario Prosperity Initiative at the Fraser Institute.

“It’s important that governments provide competitive compensation to attract qualified employees, but the fact is wages and benefits in the government sector are out of step with the private sector,” Lammam said.

According to the Fraser Institute, public-sector compensation accounts for about half of annual provincial government program spending.

The full study, Comparing Government and Private Sector Compensation in Ontario, can be found here.


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