Size of Government Increasing Across Canada, Dominating Economy, Report Finds

Report Shows Government Size Growing Across Canada, Taking Over Economy

March 28, 2024 TruthUSA

The government has accounted for a large share of the economy in seven out of 10 Canadian provinces since the beginning of the COVID-19 pandemic, according to a newly released study.

More than 40 percent of the economy across Canada in 2022 was represented by government growth, a Fraser Institute report found.

“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 Fraser Institute director of fiscal policy Jake Fuss in a press release.

When government size grows too large, it can have negative economic effects by crowding out private sector investment.

The size of government in relation to the economy hit a high of 63 percent in Nova Scotia while Prince Edward Island sat at 58.3 percent, followed by New Brunswick at 57.6 percent. The three provinces are the only jurisdictions in the country where government spending accounted for more than half the size of the economy.

It’s a different story out west, however. Government spending as a share of the economy was lowest in Alberta at 26.8 percent, followed by Saskatchewan at 32.8 percent, and British Columbia at 35.6 percent.