Atlantic public workers earn higher pay, more benefits than private sector
Taxpayer-funded government workers in Atlantic Canada are cashing in, earning significantly more than their private-sector counterparts last year.
Taxpayer-funded government workers in Atlantic Canada are cashing in, earning significantly more than their private-sector counterparts last year, even when controlling for factors like age and education, according to a new report from the Fraser Institute.
Government employees in Atlantic Canada earn higher pay and benefits than their private-sector counterparts, according to a new report from the Fraser Institute.
The research found that public-sector workers across the four Atlantic provinces received a 6.3 per cent wage premium over comparable private-sector workers in 2024, based on Labour Force Survey data. However, when unionization was factored in, the premium dropped to 3.9 per cent.
The study analyzed wages and select non-wage benefits for federal, provincial, and municipal workers in Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick, using individual-level data from January to December of last year.
In a news release, the institute argued that the findings raise questions about fairness for taxpayers and fiscal sustainability in a region with an outsized public sector.
Jake Fuss, the Fraser Institute’s director of fiscal policy, said governments could rein in spending without cutting services.
“Bringing government-sector compensation in line with the private sector would not only help governments in Atlantic Canada control spending without reducing services, but would also maintain fairness for taxpayers,” Fuss said.
While raw wage comparisons showed public workers earning 33 per cent more on average, the authors said the adjusted figure of 6.3 per cent provides a clearer comparison between similar workers in both sectors.
The report also pointed to substantial gaps in non-wage benefits that favour public employees, particularly pensions, retirement age, job security, and paid leave.
For example, more than 60 per cent of government workers in every Atlantic province are covered by a registered pension plan, compared to less than 25 per cent of private-sector workers. Among those with pensions, public employees are far more likely to receive defined-benefit plans, which guarantee income in retirement and have largely disappeared from the private sector.
“Of course, governments in Atlantic Canada should provide competitive compensation to attract qualified employees, but clearly wages and benefits in the government sector are out of step with the private sector,” said Grady Munro, a policy analyst at the Fraser Institute.
Government workers in Atlantic Canada are also retiring earlier, on average, than private-sector employees.
Prince Edward Island saw the biggest gap, where public-sector employees retire 4.1 years earlier on average than their private-sector counterparts. The lowest gap in retirement age was a tie between Newfoundland and Labrador and Nova Scotia, which saw a 2.5-year discrepancy.
Public-sector employees were also much less likely to lose their jobs in 2024 and took significantly more days off for personal reasons than full-time private-sector workers.
The findings build on previous Fraser Institute research, which showed similar public-sector compensation premiums nationally, indicating a 4.8 per cent wage premium for government employees.
A study from the Canadian Centre for Policy Alternatives highlighted that Prime Minister Mark Carney would have to cut 24 per cent of public-sector spending to meet the savings he pledged while campaigning.
In Atlantic Canada, the Fraser Institute’s study noted that the public sector is 22.5 per cent larger on a per-capita basis than in the rest of the country, amplifying the budgetary impact of higher wages and benefits.
The institute has previously argued that narrowing the compensation gap is one of the few levers available to governments seeking to stabilize finances without increasing taxes or reducing core services.