Government workers on average enjoy a higher wage premium and more generous benefits in Ontario than their private-sector counterparts, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“With the Ontario government projecting a deficit of over $13 billion this year, bringing government sector compensation in line with the private sector would help reduce costs without necessarily disrupting services,” said Jake Fuss, director of fiscal studies at the Fraser Institute.

The study, Comparing Government and Private Sector Compensation in Ontario, finds that government employees across Ontario—including federal, provincial and municipal workers—were paid 7.9 per cent higher wages, on average, than workers in the private sector in 2024, the most recent year of available comparable data from Statistics Canada’s Labour Force Survey.

Even after adjusting for unionization status, government employees are still paid 6.5 per cent higher wages.

But wages are only part of overall compensation. Government workers across Canada enjoy much more generous non-wage benefits, too, such as:

• Pensions: In 2024, 82.7 per cent of public-sector workers were covered by a registered pension plan compared to only 23.6 per cent in the private sector. Of those covered, almost all government workers (94.8 per cent) enjoyed defined-benefit pensions, which offer a guaranteed level of income and benefits in retirement, compared to 37.8 per cent among private sector workers.
• Early retirement: Public-sector workers retired 2.2 years earlier, on average, than the province’s private-sector workers.
• Personal leave: Government workers were absent from their jobs for personal reasons more often than private sector workers—14.4 days compared to 8.2 days.
• Job security: In 2024, public-sector employees were nearly six times less likely to experience job loss than private-sector workers—0.6 per cent compared to 3.5 per cent.

“All levels of government in Ontario—municipal, provincial and federal—must find ways to reduce costs as spending and borrowing have continued to ramp up,” Fuss said. “Closing the compensation gap between the government and private sectors would reduce costs and help governments move towards balancing their budgets.”

Click here to read the study: Comparing Government and Private Sector Compensation in Ontario