OTTAWA, ON (April 1, 2025):
Canada’s public sector is in decline, and you’re paying for it. A new Macdonald-Laurier Institute (MLI) report shows Canadians are footing a growing bill for services that are getting worse.
In The Inflating Balloon: Government Spending in Canada Since 2015, Tim Sargent, Director of MLI’s Domestic Policy Program, and Barbara Egan, an Ottawa-based independent researcher, deliver a damning verdict: public spending has exploded, but service quality in education, health care, and public safety has deteriorated.
Since 2015, total government spending has surged by 58.3 per cent. Federal spending alone rose by 77 per cent. The massive investment hasn’t paid off.
Despite rising real per-student spending, Canada’s 15-year-olds are scoring worse in reading, math, and science on international tests. In health care, spending rose by $88 billion, yet surgical wait times ballooned to 30 weeks in 2024, up 64 per cent since 2015, and the number of procedures per senior citizen dropped 15 per cent. Meanwhile, crime is soaring and the justice system is struggling to keep up. Violent crime is up 27.6 per cent, and the number of criminal court decisions has plunged by over 30 per cent.
“Efficiency in education, health, and public order and safety is declining markedly; injections of more resources within the current systems are unlikely to change this.” Rather than continuing to funnel more money into underperforming systems, the authors argue that “it is time for Canadians to seriously consider whether more private provision would not deliver better outcomes at a lower cost.”
The report shatters the myth that simply spending more guarantees better services. It argues that Canada’s public sector is trapped in a cycle of inefficiency, bloated administration, and declining productivity. With governments now consuming over 40 per cent of GDP and mounting US pressure to increase defence and border spending, the status quo is fiscally and politically untenable.
Sargent and Egan call for fundamental reform: performance-based management, private-sector delivery where appropriate, and a renewed focus on outcomes, not just inputs.
Canadians face the worst of both worlds: a high-tax society paired with crumbling public services. As The Inflating Balloon makes clear, the time for complacency is over. Canada must choose reform or risk further decline.
To learn more, read the full paper here:
For further information, media are invited to contact:
Dagny Pawlak-Loerchner
Senior Communications Officer
613-482-8327 x113
dagny.pawlak-loerchner@macdonaldlaurier.ca
