This study reviews the consequences of the exceptional rise in government spending in Canada that was sustained from World War II through the early 1990s. Our interest is in the economic impact and otherThis study reviews the consequences of the exceptional rise in government spending in Canada that was sustained from World War II through the early 1990s. Our interest is in the economic impact and other consequences of the size of the government sector relative to the national economy supporting it. To gain a broad perspective, we examine the evidence at home and abroad.

The size of government has not been a prominent issue in public policy, because of other pressing distractions in public finance. In Canada, public finances have been in such disarray over the last generation that debate on fiscal matters has centred principally on regaining control of runaway government spending and putting a lid on the explosive growth of public debt.