Here's how much more Ontario government workers earn than private-sector employees

Ontario government workers earn a notably higher wage premium and generous benefits than their private-sector counterparts, according to a new study by a conservative Canadian think tank. 

The study, Comparing Government and Private Sector Compensation in Ontario, conducted by the Fraser Institute, finds that government workers in Ontario — including municipal, provincial, and federal employees — received 7.9 per cent higher wages than their private-sector counterparts in 2024.

The study uses the most recent available data from Statistics Canada's Labour Force Survey, and controls for factors like marital status, education, gender, age, job permanence, and immigrant status.

After adjusting for unionization status, government employees are still paid 6.5 per cent higher wages than private-sector employees, and also enjoy more generous non-wage benefits.

Just over 82 per cent of public-sector workers were covered by a registered pension plan in 2024, compared to just 23.6 per cent in the private sector. Among those covered, 94.8 per cent of government workers enjoyed defined-benefit pensions, including a guaranteed level of income and benefits in retirement. 

Government workers also retired 2.2 years earlier on average, compared to private-sector workers, and are much less likely to lose their jobs. According to the study, the private sector sees an annual job loss rate of 3.5 per cent while the public sector sees only 0.6 per cent. 

In 2024, government sector workers also lost more work time for personal reasons (14.4 days on average) than their private- sector counterparts (8.2 days).

"With the Ontario government projecting a deficit of over $13 billion this year, bringing government sector compensation in line with the private sector would help reduce costs without necessarily disrupting services," said Jake Fuss, director of fiscal studies at the Fraser Institute.

"All levels of government in Ontario — municipal, provincial and federal — must find ways to reduce costs as spending and borrowing have continued to ramp up. Closing the compensation gap between the government and private sectors would reduce costs and help governments move towards balancing their budgets."