Report finds public spending relative to GDP rising in every province since 2019
Canada’s public sector is taking up a larger share of economic activity, with new research showing government spending reached about 44% of the country’s GDP in 2024.
A report released Thursday by the Fraser Institute found total outlays from federal, provincial and municipal governments represented 43.6% of national output last year. The findings also show that every province has seen an increase in the size of government relative to the economy since 2019.
"The size of government relative to the size of the economy has been increasing across the country in recent years, with all 10 provinces seeing increases since 2019," said Jake Fuss, director of fiscal policy at the Fraser Institute and co-author of The Size of Government in Canada in 2024.
The analysis tracks consolidated public spending as a share of GDP from 2007 through 2024, the latest period with comparable data. Over that longer timeframe, government’s economic footprint grew in nine provinces, with Prince Edward Island standing as the lone jurisdiction where it declined.
The trend has been especially pronounced in the years following the pandemic. Between 2019 and 2024, all provinces recorded growth in the public sector’s share of economic output, pointing to a broad national shift toward higher levels of government spending.
Provincial variations remain considerable. In 2024, public spending accounted for just 30.4% of GDP in Alberta, compared with 61.2% in Nova Scotia.
The report also suggests that current levels of government spending are above the range often associated with stronger economic performance. Earlier research indicates that public outlays between roughly 26% and 30% of GDP are typically linked to faster growth and improved social outcomes, while spending beyond that threshold can weigh on private-sector investment and overall expansion.
“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,” Fuss said.
The findings come as governments and market participants continue to assess fiscal policy choices and their implications for economic growth, public finances and long-term investment conditions.
