OTTAWA, ON (November 20, 2025):
Canadians pay more, but get less: despite a significant increase in government spending over the past two decades, we are receiving far less value for our tax dollars.
With public services deteriorating, wait times soaring, and overall productivity in the public sector stagnating, it’s no wonder most Canadians are fed up.
In Bigger, Not Better: How Canada’s public sector is delivering less for more, the second report in a three-part series, economist Stephen Tapp offers two composite indicators – the Size of Government Index (SGI) and the Government Productivity Index (GPI) – to provide the clearest picture yet of the increasingly poor performance of Canada’s ballooning government sector.
“Canada’s government sector has grown over time … Unfortunately, greater size hasn’t translated into greater efficiency,” explains Tapp.
According to Tapp, the growth in both the size of government and in public-sector spending is being fuelled by demographic pressures, rising demand for public services, and new policy initiatives.
While spending surged temporarily during the COVID-19 pandemic, it remains above pre-pandemic levels, contributing to the upward trend in the SGI.
Using the GPI, Tapp reveals a steady, three-decade slide in government productivity relative to the business sector.
Because the GPI is a relative measure, this widening gap means the government sector is becoming less productive compared to the private sector, even if its own absolute productivity inches upward.
Tapp warns that if government continues to expand while offering substantial compensation premiums and lagging in productivity, the resulting imbalance will place growing strain on public finances.
“With an aging population, slowing economic growth, and mounting fiscal pressures… Urgent reforms are required to ensure Canadians receive greater returns for their tax dollars.”
To learn more, read the full paper here:
Stephen Tapp is the CEO and chief economist at the Centre for the Study of Living Standards (CSLS).
For further information, media are invited to contact:
Skander Belouizdad
Communications Officer
(613) 482-8327 x111
Skander.belouizdad@macdonaldlaurier.ca
