The study measures federal, provincial, and local government spending in each province as a share of the economy (GDP) from 2007 to 2022, the most recent year of comparable data.
It finds that government size grew in every province except Prince Edward Island and Saskatchewan during that period. In 2022, the size of government relative to the economy as a whole across Canada ranged from a low of 26.8 per cent in Alberta to a high of 63 per cent in Nova Scotia, and was 40.5 of Canada’s total economy.
Previous research has shown that the size of government (as a share of the economy) to maximize economic growth and social progress is between 26 and 30 per cent of the economy (GDP). When governments exceed that size, it imposes negative effects on the economy, such as crowding out private sector investment, but without providing proportionate benefits such as greater social progress.
“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,” said Jake Fuss, director of fiscal policy at the Fraser Institute and co-author.
