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Government employees in Canada paid 9.7% more than those in private sector

Staff writer |
Government employees in Canada receive higher wages and likely more generous non-wage benefits than their private-sector counterparts.

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That founed a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

Using Statistics Canada’s Labour Force Survey data from January to December 2013, the study calculates that government employees in Canada (federal, provincial and local governments) receive 9.7 per cent higher wages, on average, than comparable employees in the private sector.

This wage premium accounts for differences among individual employees such as age, gender, marital status, education, tenure, type of work, size of establishment, industry, and occupation. When unionization is accounted for, the government-sector wage premium drops to 6.2 per cent.

But wages are only part of an employee's total compensation, which also includes non-wage benefits such as pensions, early retirement and job security. And according to several strong indicators, the government sector as a whole enjoys superior non-wage benefits.

In 2013, 87.8 per cent of government employees in Canada were covered by a registered pension plan compared to only 23.9 per cent in the private sector. Of those covered, 94.2 per cent of government employees enjoyed defined-benefit pensions (which guarantee a certain level of benefits in retirement) compared to 47.5 per cent of private-sector employees.

Between 2009 and 2013, government employees retired 2.4 years earlier, on average, than Canada’s private-sector employees.

In 2013, 3.6 per cent of private-sector employees experienced job loss in Canada, compared to only 0.7 per cent of government employees. Absence rates: Full-time employees in Canada’s private sector were absent due to personal reasons for an average 8.1 days in 2013 while the average government employee was absent 12.1 days.

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