Is The Government Too Big?

According to a recent report, the answer is yes in several provinces

NEWS RELEASE with Chris O. Edits

A new study released by the Fraser Institute last week shows data that indicates an overall increase in the size of federal, provincial, and municipal governments everywhere except two provinces from 2007 to 2022.

While the caveat that these increases are relative to the size of their economies, it does give credence to those who say the government is too big or that there is just too much government in Canada.

The Fraser Institute, an independent, non-partisan Canadian public policy think-tank is not editorializing on opinion but simply presenting the facts.

“The size of government increased in eight of ten provinces and the country as a
whole over the last decade-and-a-half,” said Alex Whalen, associate director at the
Fraser Institute and co-author of The Size of Government in Canada in 2022.

The study measures federal, provincial, and local government spending in each
province as a share of the economy (GDP) from 2007 to 2022, the most recent year of
comparable data.

It finds that government size grew in every province except Prince Edward Island and
Saskatchewan during that period.

In 2022, the size of government relative to the economy as a whole across Canada ranged from a low of 26.8 per cent in Alberta to a high of 63 per cent in Nova Scotia, and was 40.5 of Canada’s total economy.

Previous research has shown that the size of government (as a share of the economy)
to maximize economic growth and social progress is between 26 and 30 per cent of
the economy (GDP).

When governments exceed that size, it imposes negative effects on the economy, such as crowding out private sector investment, but without providing proportionate benefits such as greater social progress.

“It’s important to understand just how much governments across Canada have grown
in recent years, and what impact that might have on our economy moving forward,”
said Jake Fuss, director of fiscal policy at the Fraser Institute and a co-author of the study.

Those interested can see the full report at: The Size of Government.


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