Comparing Government and Private Sector Compensation in Canada, 2020

Main Conclusions

• Using data on individual workers from January to December 2018, 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 gender, 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 9.4% wage premium, on average, over their private-sector counterparts in 2018. When the wage difference between unionized and non-unionized workers is taken into account, the wage premium for the government sector declines to 5.8%.
• Available data on non-wage benefits suggest that the government sector enjoys an advantage over the private sector. For example, 87.7% of government workers are covered by a registered pension plan compared to 22.5% of private-sector workers. Of those covered by a registered pension plan, 90.8% of government workers enjoyed a defined-benefit pension compared to two in five (40.7%) 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: 0.4% in the public sector compared to 2.4% in the private sector.
• Moreover, full-time workers in the government sector lost more work time in 2018 for personal reasons (14.6 days on average) than their private-sector counterparts (8.6 days).