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 | 11.81% | |||||||||
| Printing and publishing | 6.91% | |||||||||
| Machinery | 1.34% | |||||||||
| Motor vehicles, other transport equipment and parts | 1.78% | |||||||||
| Electrical, electronic and communications products | 1.16% | |||||||||
| Chemicals, pharmaceuticals and chemical products | 13.24% | |||||||||
| Repair construction | 23.61% | |||||||||
| Communications services | 9.12% | |||||||||
| Finance, insurance and real estate services | 4.47% | |||||||||
| Professional, scientific, technical, computer, administrative, | 10.47% | |||||||||
| support, and related services | ||||||||||
| Wages and salaries | 21.44% | |||||||||
| Supplementary labour income | 28.81% | |||||||||
| 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) |
There was an article in Canadian Public Policy last year on this topic:
Just How Much Bigger Is Government in Canada? A Comparative Analysis of the Size and Structure of the Public Sectors in Canada and the United States
Abstract: We compare the size and structure of the public sectors of Canada and the United States from 1929 to 2004 using national accounting and employment data. The challenge of defining the public sector for comparative purposes is explored and illustrated, especially with respect to the treatment of non-profits, and a number of intriguing similarities and differences in the comparative evolution of the public sectors are identified that remain to be explained. Use of a new Fisher-type government deflator for Canada indicates that, as of 2003, real government spending relative to real income was about 27 percent of Gross Domestic Product (GDP) in both countries.