Comparing Government and Private Sector Job Growth in the COVID-19 Era

Summary

• This bulletin decomposes the job creation data from recent years to compare the extent of job creation in the government and private sectors.
• We find that the public (government) sector accounts for a large majority (86.7 percent) of all net new jobs created since the start of the pandemic.
• Meanwhile, there has been almost no net job creation in the private sector (including self-employment). Net jobs increased in the private sector by just 0.4 percent between February 2020 and July 2022 compared to an increase in net jobs of 9.4 percent in the government sector.
• An adjustment for population growth shows that the share of adults above the age of 15 employed in the private sector has fallen from 49.3 percent to 48.2 percent during this period.
• It is clear that the government sector is disproportionately driving Canada’s labour market recovery. Private sector total employment is now only slightly above pre-pandemic levels and once an adjustment is made for population growth, private sector employment is in fact lower than it was in February 2020.