Winnipeg: The Frontier Centre for Public Policy today released The Size and Cost of Manitoba’s Public Sector. This policy study examines the current state of public sector employment in Manitoba and its cost to the taxpayer. The central conclusion of the study is that although Manitoba’s high government employment rates are very high and therefore costly, the situation can be addressed in the medium-term through an incremental approach that freezes or slightly reduces total government employment while allowing population growth to shrink the relative size of the provincial public sector.
In this study, Ben Eisen, a Senior Policy Analyst at the Frontier Centre, and Jonathan Wensveen, a Manning Centre-sponsored intern at the Frontier Centre, examine the cost to taxpayers of Manitoba’s high rate of public sector employment.
Key Findings Include:
- In Manitoba, in 2010 there were 103 combined provincial and local level public sector employees per 1,000 residents. Across Canada, there were 84 such employees per 1,000 residents.
- In Manitoba, there were approximately 23, 400 more provincial and local public sector employees in 2010 than there would have been be if the province’s rate of government employment were in line with the Canadian average.
- If Manitoba’s rates of public sector employment were in line with the national average, the wage bill for public sector employment in the province would have been approximately $1.2 billion less in 2010. This is equivalent to savings of approximately $985 for every man, woman and child in the province.
- New Brunswick has the lowest rate of public sector employment of the 6 small provinces (population under 2 million residents). If Manitoba’s government employment rates were in line with New Brunswick’s Manitoba’s public sector wage bill would have been reduced by $640 million in 2010. This is equal to $520 per resident, and more than the province’s entire budget deficit for the 2010 fiscal year.
- Manitoba’s high rates of public sector employment are costly to taxpayers, but they can be brought much closer into line with the Canadian average in the medium term through a gradual approach, that avoids any drastic, sudden or ill-advised cuts.
- If Manitoba simply maintains its public sector workforce at 2010 levels for the next ten years instead of allowing the number of employees to continue to increase, population growth will cut the existing gap between Manitoba and Canada in half by the year 2020, bringing Manitoba’s public sector employment rate down to 93 employees per 1,000 residents.
- If governments in Manitoba are willing to reduce government employment levels by just 5 percent over the next decade, Manitoba’s provincial/local government employment rate can be reduced to 88 employees per 1, 000 residents by the year 2020.
- A 10 percent reduction in the number of public sector employees levels over the next decade, combined with population growth, would reduce Manitoba’s provincial/local public sector employment rate to 83 employees per 1,000 residents –below the current national average.
“Observers of Manitoba’s economy and politics have long recognized that Manitoba’s public sector is large by Canadian standards, and that the province’s high level of government employment hinders economic performance,” says report co-author, Ben Eisen.“Unfortunately, the problem has persisted for so long that some people consider Manitoba’s larger than average public sector to be an immutable part of Manitoba’s political culture and suspect that bringing Manitoba closer into line with Canadian norms would require drastic and politically unrealistic cuts to government staffing levels.” This is not necessarily true, explains Mr. Eisen: “an examination of population projections suggest that the rates of government employment in Manitoba can, over just ten years, be brought much closer into line with the Canadian average if the government workforce can be held at its current size, instead of being allowed to continue to grow.” Mr. Eisen stated that an incremental approach to reducing government employment rates in Manitoba would reduce the cost of government for taxpayers, and “contribute to the development of a “more dynamic, market-driven provincial economy.”
Download a copy of The Size and Cost of Manitoba’s Public Sector HERE.
For more information and to arrange an interview with the study's authors, media (only) should contact:
Frontier Centre for Public Policy