While the latest job numbers showed an overall employment gain in Canada, a closer look reveals a concerning trend — public-sector hiring is masking significant private-sector job losses.
The government payroll swelled by 18,800 positions last month, more than offsetting over 16,400 jobs shed by businesses.
This lopsided dynamic highlights the growing bloat of the public sector workforce under the Trudeau government. Since 2015, federal public service hiring has skyrocketed by 37.9% according to the Montreal Economic Institute (MEI), far outpacing economic and population growth over that period.
Economists warn this unsustainable expansion is painting an artificially rosy picture of the job market while papering over major cracks in the private sector.
“If you look at how the private sector’s trending, it’s sharply decelerating,” TD Bank’s Beata Caranci told Bloomberg, tying the hiring slump directly to the Bank of Canada’s interest rate hikes needed to tame inflation.
Caranci added that the struggling private hiring market “is going to be one of the more compelling arguments” for potentially earlier rate cuts by the central bank. Many analysts believe soaring borrowing costs have chilled business investment and workforce expansion plans.
The government attempted to defend the public sector bloat through a recent spending review by Treasury Board President Anita Anand. However, rather than trimming the payroll, Anand merely reshuffled $10.5 billion towards other priorities like healthcare — merely, as the idiom goes, rearranging deck chairs on the Titanic of runaway government growth.
Anand, who claimed the purpose of the review was not to cut jobs, said “certain departments” may see workforce cuts through attrition. There are currently no firm targets or commitments to rightsize the ballooning public sector.
With private companies tightening their belts, taxpayers are justifiably questioning why their bill for the liberal government’s liberal use of funds continues growing unabated.
Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
