How Large is the Public Sector?

Murray Dobbin recently reminded me of and forwarded a very old article by David Robertson from the 1980s, published in the CUPE journal the Facts, which laid out some numbers on the scale and importance of the public sector vis a vis the whole economy. In search of comparable information, I explored StatsCan’s input- output model. (See Table below.)

Spending by all levels and government plus not for profits (which are predominantly funded by governemnts) accounts for 21% of all wages, and an even heftier 29% of supplementary labour income, reflecting much higher rates of pension and health benefit coverage. The public sector accounts for 12% or one in every eight dollars spent in Canada.

The public sector is a significant customer for the ouput of the private sector in a number of sectors – including repair construction (most notably by the muncipalities), professional and financial services, pharmaceuticals (reflecting large purchases by hospitals and for government drug plans) and printing and publishing. The overall share of the public sector market seems to have fallen quite a bit since the late 1990s, probably becasue so many large crown corproations have been privatized, but it remains a significant source of demand for goods and services from the private sector (and from improts).

Table 1 Percentage of Total Spending Accounted for by Governments and Not For Profits Industries in 2004

% by Government sector
Total commodities

Printing and publishing


Motor vehicles, other transport equipment and parts

Electrical, electronic and communications products

Chemicals, pharmaceuticals and chemical products

Repair construction

Communications services

Finance, insurance and real estate services

Professional, scientific, technical, computer, administrative,

support, and related services
Wages and salaries

Supplementary labour income


Source: Statistics Canada, Table 381-0013 Inputs and outputs

, by industry and commodity, S-level aggregation and North American Industry Classification System (NAICS), annual (dollars)

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