Comparing Government and Private Sector Compensation in Canada, 2023 Edition

Main Conclusions

• Using data on individual workers from January to December 2021, this report estimates the wage differential between the government and private sectors in Canada. It also evaluates four non-wage benefits for which data are available to quantify differences in the compensations offered by the two sectors in these provinces.
• After controlling for factors like sex, age, marital status, education, tenure, size of firm, job permanence, immigrant status, industry, occupation, province, and city, the authors found that Canada’s government-sector workers (from federal, provincial, and local governments) enjoyed an 8.5% wage premium, on average, over their private-sector counterparts in 2021. When the wage difference between unionized and non-unionized workers is taken into account, the wage premium for the government sector declines to 5.5%.
• Available data on non-wage benefits suggest that the government sector enjoys an advantage over the private sector. For example, 86.6% of government workers are covered by a registered pension plan compared to 22.9% of private-sector workers. Of those covered by a registered pension plan, 90.6% of government workers enjoyed a defined-benefit pension compared 39.9% of private-sector workers.
• In addition, government workers retire earlier than those in the private-sector—about 2.4 years earlier on average—and were much less likely to lose their jobs: 1.0% in the public sector compared to 4.8% in the private sector. Moreover, full-time workers in the government sector lost more work time in 2021 for personal reasons (14.9 days on average) than their private-sector counterparts (9.8 days).