Canadian employment doesn’t look like it moved much, but under the surface was a giant shift. Statistics Canada (Stat Can) data shows the number of jobs virtually unchanged in July, growing 1.7% (+345k jobs) over the past year. As a result, the unemployment rate was also flat at 6.4%, adding 0.9 points from last year. Mostly boring until you dive into the details that show the public sector now accounts for most jobs, overseeing 1 in 4 employees in Canada.
Canada’s Private Sector Suffers A Setback, New Norm Is Low Growth
Canada’s rapidly growing population isn’t driving much private sector growth. Employment in the sector fell 0.3 points (-42k jobs) to 13.38 million people in July. Annual growth managed to climb 0.6% (+86k jobs) over the past year, but that is nowhere near the scale of population growth.
1 In 4 Employed Canadians Now Work For Government
The share of total employed Canadians that work for the public sector (includes provincial and municipal governments). In percentage points.
Source: Statistics Canada; Better Dwelling.
Most Canadian employment growth is now reliant on the public sector. Public sector employment climbed 0.9% (+41k jobs) to 4.45 million in July. Annual growth shows 4.8% (+205k) jobs added, a rate 8x greater than private sector growth. Canada’s now so dependent on public sector growth that government workers represent 1 in 4 employed workers.
Canada Is Creating Fewer Entrepreneurs And A Bigger Government
Canadian public sector employment vs self-employed population. In millions of people.
Source: Statistics Canada; Better Dwelling.
Canada’s self-employed population has always been smaller than its public sector, but the gap is widening. The self-employed population shrunk 0.5% (-1.6k people) to 2.6 million in July. Annual growth managed to squeeze out an increase of 2.1% (+55k people), but the trend has generally declined. Since 2020, the public sector has added 4 jobs for every self-employed person lost.
The decline of self-employed individuals isn’t entirely unexpected in this environment. Sharp increases in operating costs and weak consumer spending already work against the sector. At the same time, the industry is facing higher taxation liabilities, implying it’s not an area the current administration is interested in growing. This is a big sentiment warning—people only go out on their own when they’re confident in the economy. Self-employment is a small segment, but the lack of development is a big warning flag.
As for public sector employment growth, it’s neither good or bad by itself. It needs context to be understood, since growth also occurs in strong economies. When we zoom out and provide context, that’s when we see a huge red flag.
The Bank of Canada (BoC) recently warned economic growth is (and will) lag global growth. They further warned that employment prospects are shrinking, and rising unemployment is likely. Now we’re finding out that abysmal growth is with significant state-stimulus to preserve the economy. If significant stimulus is required for minor growth against a global economic boom, how much will be required during a global slowdown?
Shocking. I was wondering about this. So, we have 25% government, estimated 50% real estate related, and only 25% remaining for everything else? Canadian economy is an accident waiting to happen IMO.
This is what marxists and ‘social democrats’ (just another name for commies/socialists) want.. big government.
Better Dwelling now publishes more and more articles that have nothing to do with housing, but show a right-wing orientation. Stick to your knitting. Housing is complicated already.
Found the gov employee that suddenly thinks employment and affordability aren’t a housing issue. LOL.
Also funny that you’re making fun of anyone when the only person that would hire you has to do it so you don’t beg for welfare.
No wonder our GDP is in the tank.
We need rid of this Trudeau/Singh regime. While we rage against government workers we are not paying enough attention to the rapid decline of the private sector. This is the result of their incompetence and I believe a deliberate attempt to undermine our economy and drive Canadian’s our. Meanwhile bring servile labor by the millions.
It is true!
Canada needs much higher immigration for the labor shortage.
Public sector should be hiring more people to support the economy and rates need to be lowered to 0% to support real estate.
You couldn’t have read the statistics, Economic Observer. Canada has many unemployed people, so how is increased immigration going to cure this? Very few, if any, immigrants actually create jobs. Tim Hortons isn’t a job that produces wealth in the economy.
massive and unproductive over-investment in real estate is the rentier-mind-virus that afflicts canadians … instead of supporting job and wealth creation thru capex in productive industries, we put hard earned money into non-productive and wasteful ‘assets’ such as real estate …
The problem is that capital is always looking for a return, and with Canada’s productivity extremely low, excessive red tape through permits, delays, taxes, etc., investment in almost anything else has not made sense – or presided an upside significant enough to outweigh the risks.
and…….high taxes cause investment to flee.
Once upon a time that was considered a good thing. Peter Lougheed boasted 3 out of 5 Albertans in the civil service overall. Strong civil service means Strong program management. Good union salaries and benefits. Cons don’t like it because they want to run the country and their profits through private means and profits. A strong civil service means a strong local economy nit some kind of fractured jigsaw puzzle like Smith is trying to run. We have theorist economy in the West thanks to her totally clueless lack.of governance and kowtowing to the energy sector. Even that’s backfiring. She’s scared so many renewables away. None of the traditional energy companies are able to diversify like the rest of the global big players.
Modern Canada taking its rightful place among the other Banana Republics of the world.
Who needs real productivity and generation of tangible wealth when you can tax then waste it on non-productive public servants who have more job security and compensation than they deserve based on merit…
I can’t remember the dates but back in 70s Denmark had around 50% of population employed by govt. at some point that became unbearable (financially) and they took a new direction. Heavy on edu for all and student grants instead of welfare. Denmark is fairly succesfull & high tech today.
Wasn’t the dependence based on the gov trying to bail out a prolonged recession economy? The big issue here IMO isn’t gov employment, but they’re using all the gov employment to produce minor growth.
Canada is being overwhelmed and drained by a bunch of useless, lazy public sector WFH couch potatoes.
Why take risks and invest your money in Canada? Better to invest in countries more supportive of entrepreneurship.
If 100% was government, we’d cease to exist as a nation
Government workers are an expense, they do not make a financial or economic contribution to Canada. They do not do anything of real value or produce anything that can be resold for a profit. We could easily reduce our civil service by 50% and still have the same lousy service and long wait times as we have now, but at 50% of the cost.
I would hate to try starting a business in this country. There are so many rules and regulations and taxes. I guess it shows that all the new government bureaucrats have to have something to work at so they come up with more rules to enforce. This in turn takes more tax dollars and debt to pay for it all. Hats off to anyone that does try to start a business in this country because you are brave!
Only the commodity sectors keep Canada afloat: oil and gas, metals, lumber, pulp and agricultural exports bring back real currency.
But fewer and fewer Canadians actually produce something for a living – and what isn’t taken in finance payments by the oligarchs is taken by the government to buy off their fellow citizens.
As you know, the Canadian government is buying CMBs to prevent the real estate market collapsing – but that would not be enough in the face of a global slump in commodity prices.
To top it all off the country is overseen by a crimineau.
According to a lot of long time Provincial government employees in BC, the NDP has hired numerous “consultants “.
The sad part is the majority are recent immigrants with little knowledge of Canadian government operations.
My neighbor as an example is frustrated that whenever an assignment is asked that a consultant completes, the clock is always extended because of some issue that has nothing to do with the job. In other words the government is providing on the job training for high paid positions that Canadians had to show proof of qualifications before even starting. The same does not apply to recent immigrants.
Actually, you are being generous. Taking the governments statistics at face value or even performing a cursory ‘in-depth’ analysis is not sufficient.
Please, for a moment, take a step back. Take a step back to a time where government wasn’t absolutely involved in everything.
Examine the extent to which government has been allowed to fester, much akin to the UK.
From the Frasier Institute – but remember these are from 2022. Things have detioriated significantly since then with our dollar losing significant buying power:
“In 2022, the average family (including unattached individuals) earned cash income of $106,430 and paid total taxes equaling $48,199. This means the total tax bill of the average Canadian family in 2022 amounted to 45.3 per cent of its household income. This is larger than the combined 35.6 per cent of household income that families spent on food, clothing, and shelter.”
Yeah, when you add PST, GST, HST Trudeau TST (Carbon Tax) e c, we’re actually paying closer to 63 percent. But who cares at this point anyway, just buy real estate, young man!
You have to approach it from the perspective of how many people either directly or indirectly receive their income from the government. This includes all controlling all vice: alcohol, marijuana, nicotine of which we pay the highest rates in the world. Border Agents. Insurance. Private sector employees working on behalf of government. Pharmacists. Etc etc.. I hear the CRA is hiring and is growing so quickly! It must be such an inspiring and innovative place to be at. I hear they’re going to be using Ai within three years to calculate our taxes for us. That’ll be swell.
Back to the point:
The number of people receiving an income – directly or either indirectly from the government – the number is approaching much closer to 50 percent.
And also please understand that you are using data that is no longer relevant, and so we also have to incorporate new data and leading indicators.
Total working-age population in Ontario: ~10.5 million
Public sector workers: ~3 million
Private sector workers on government contracts: ~1.5 million
Total receiving government-related income: ~4.5 million
Percentage of working-age population: ~43%
I’m pretty sure I haven’t even scratched the surface yet. Have you ever gotten calls from the CRA? I have. They don’t speak English. They threaten you. “Get loans from your family,” they say. “Get credit cards, just pay it off, or else….” if you don’t pay it off within 6 months, well, I’ll let you figure it out. And this is all under daily compound interest, which is cool.
Same deal with bylaw officers. Why do I need a business when we’re not open to the public? They too couldn’t speak English and I even pointed out the mistakes in grammar and spelling in their government forms. After two years, they threatened me with a $110,000 fine for not having a ‘business license’.
I provide high paying jobs for talented young people. I can’t even leave Canada as the departure tax would cripple me. I don’t own a home or have a family. I’m 40.
I face the brunt of not having any healthcare, welfare, or social care for my disabled brother. He’s not even allowed to earn an income. My Father ran a successful business for many years, but suffered a bankruptcy in the downturn. He has no retirement to speak of. What do you think this puts on me?
I tried to go see if I could buy a house. The bank told me I’d need to earn over a million a year.
Meanwhile, progeny of CCP are plastered in tattoos running reverse opium wars into our country, and glorified by locals and media when they launder their proceeds to create ‘jobs’ with their ‘companies’.
This is a haven for deviants and sociopaths.
Two tierism exists everywhere, and is no better exemplified than Canada, Where newcomers (many of whom I’m sure are good people) get preferential mortgage rates, and status. And their lottery ticket is just getting started.
I don’t have any answers. But I still have hope. I won’t give up. But being vocal and strong and public is a recipe for being taken offline.
If we remove military, Law Enforcement, not so bad. Problem with Canada we were never very entrepreneurial nation. Too many of us me included just want a paycheque.
Moar taxes!!! Need more gdp and debt!
These government deficits are ridiculous.
“Mom….I just got a job with The Ministry of Paper Clip Counting. ”
“Oh honey…….I’m so glad we sent you to university. “
Apparently the Liberal Party of Canada thought that the implosion of Greece was an instruction manual.
Canada needs to stop immigration and the Government needs to stop hiring and find a way to reduce the public service employment forever, not just temporarily. Only then will we have entrepreneurs, because people will have no choice if they want to put food on the table.
Articles like this are nothing but ragebait. The federal public service is under 300,000 jobs, which is less than 1% of the population.
Think about what other roles are employed by the “government:” doctors, nurses, police, firefighters, construction crew, bus drivers, sanitation workers, etc.
You all want less of those?
It’s neither good nor positive. It’s important to understand when the gov is making most of the jobs because it means the economy is stagnating. The state will have to borrow more to continually fund it, since you can’t pay 1/3 of your income into taxes and suddenly fund a new job.
It’s only rage bait if you think discussion of where the economy is at threatening, which reveals an interesting bias about public sector workers.
Public servants also pay taxes at the same rate, so the positions are already 25% funded by the roles themselves.
Additionally, all the services I mentioned above are 100% necessary for a functioning society. You can either fund them through your taxes or via user fees.
Take a look stateside to see how the latter plays out.