The Alarming Expansion of the Public Sector in Quebec

Viewpoint on the expansion of the public sector workforce in recent years and its impact on government budget expenditures

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This Viewpoint was prepared by Gabriel Giguère, Senior Policy Analyst at the MEI. The MEI’s Taxation Series aims to shine a light on the fiscal policies of governments and to study their effect on economic growth and the standard of living of citizens.

Since 2019, the main driver of job growth in Quebec has been the public sector.(1) Today, nearly one Quebecer in four works in the public sector, which is well above the average both for Canada’s major provinces and for other OECD countries.(2) This rapid expansion of the state apparatus should alarm us, as it significantly increases pressure on public finances at every level of government.

Public Sector Jobs at Every Level

Since January 2019, 431,200 jobs have been created in Quebec across all sectors (excluding the self-employed),(3) but most of this growth has been in the public sector. When one combines all levels of government, federal, provincial, and municipal, the number of new public sector positions comes to 237,300. This represents 55% of all the jobs generated since 2019.(4)

Conversely, the private sector accounted for 45% of job creation (see Figure 1), or 193,900 jobs, an increase over the same period of somewhat more modest proportions.(5) In addition, the number of self-employed workers fell by 6.2%, which represents approximately 34,000 workers. These findings are rather alarming: while entrepreneurship is declining in Quebec, the public sector continues to expand.

By way of comparison, over the same period (from the beginning of 2019 to today) the public sector in Ontario has been responsible for only 31.3% of that province’s total job creation (excluding self-employed workers), a substantial difference relative to Quebec.(6) This predominance of the public sector in employment growth does not obtain in the rest of the country either. Excluding Quebec, the share attributable to the public sector across Canada stands at just 36%, which is 19 percentage points lower than in Quebec.

Quebec’s public sector has been growing steadily since the beginning of 2019. This trend is all the more alarming given that the economic incentives specific to the public sector often encourage sustained expansion of the bureaucratic apparatus. According to economist William A. Niskanen, rather than trying to optimize public services for users, public managers are continuously looking to increase their budgets, including by hiring new civil servants.(7) This reasoning seems an accurate description of the dynamics of public sector job creation observed in Quebec today.

Mounting pressure on government spending

This expansion of the public sector workforce increases pressure on government budget expenditures. For the Quebec government alone, salary expenditures exceeded $64 billion in 2025-26, up $4.8 billion or 8.1% (in constant 2026 dollars) since March of 2019—a rise that must ultimately be paid for by taxpayers.(8)

Added to this are renegotiations of public sector collective agreements, such as the one in Quebec in 2024, which exert further pressure on spending. Indeed, wage increases granted to Quebec public sector employees are expected to amount to $4.1 billion in 2027–2028, an extra burden that—again—falls on taxpayers.(9)

According to the Parliamentary Budget Officer, total staffing-related expenditures at the federal level—including those attributable to Quebec—have increased by $14.1 billion (in constant January 2026 dollars) since 2019, or 30.5%.(10) On top of the increase in staff numbers, higher pay (expected to reach $172,000 per full-time federal employee in 2029–2030) will also add to the strain on government spending.(11)

Nor is the municipal sector immune to this trend. For example, the City of Montreal saw its compensation expenses increase by $68.2 million (in constant 2026 dollars) between the beginning of 2019 and 2026, an increase of 2.8%.(12) In 2023, about one-third of City of Montreal employees earned salaries over $100,000.(13)

Shrinking the public sector

Governments must stop placing the burden of today’s expanding bureaucracy on future generations. For this to happen, all levels of the public sector need to reduce their workforces to ease the burden on public finances. This is necessary to foster intergenerational equity.

Over the past few months, various levels of government have announced their intention to reduce the number of public sector employees.(14) Significant cuts have indeed been successfully implemented in the past, most notably under Jean Chrétien’s federal government.(15) So a considerable reduction in public sector staffing is possible. It is also necessary for the future.