The size of the Canadian government became very large during the COVID-19 pandemic, but even before that, the size of the federal government and almost all state governments exceeded the optimal point of benefiting citizens. It was already growing.
In March, research co-author Alex Hollen, a policy analyst at the Fraser Institute, said, “How much has governments across Canada grown in the last few years and how will that affect future economic recovery? It is important to understand what it is possible to give. ” 17 releases.
“The size of the Canadian government in 2019Found that, with the exception of Alberta, the government grew to a certain extent in the remaining states between 2007 and 2019. Exceeding the optimum level Compared to the size of their economy.
The author quoted in determining the optimal government size standard 2013 survey Livio Di Matteo, Professor of Economics At Lakehead University, he concluded that in order to maximize economic growth in a country, the size of the government should be between 26% and 30% of gross domestic product (GDP).
“If the government goes beyond that size, it will have a negative impact on the economy, such as crowding private sector investment, but it will not provide proportional benefits such as increased social progress,” the Fraser Institute said. I am saying.
“Importantly, the data used in the analysis was before COVID-19 and recession-related spending, which means that the size of the government has already exceeded its optimal size before the current surge in spending. I did. “
The study measured federal, state, and local spending in each state. This includes spending on goods and services, remittances, capital transfers and subsidies. Next, we compared total spending to the economic size of each state as measured by GDP.
The authors pointed out that the size of governments across the country ranges from a minimum of 29.7% in Alberta’s economy to a maximum of 60.2% in Nova Scotia’s economy. In Canada as a whole, the government accounted for 40.4% of the economy in 2019.
The author also observed patterns based on geographic location. For example, Primorskaya is the largest government, with Nova Scotia leading 60.2%, followed by Prince Edward Island at 58.5% and New Brunswick at 57.4% of their respective economies.
With the addition of 44.1% for Newfoundland and Labrador, the Atlantic states Quebec (47.8%) and Manitoba (47.7%) show the highest spending in the country. I have written..
According to Whalen, governments across Canada have grown in size over the years, but the increase has not been near the Atlantic states.
“Atlantic Canada has been burdened by the large government sector for decades, and evidence shows that the trend continues to this day,” Whalen said.
“Furthermore, as governments grow in size, they can undermine the ability of the region to recover from the economic impact of a pandemic.”
In contrast, the three westernmost states had the smallest government share of the economy. British Columbia came in second with 35.7% after Alberta, followed by Saskatchewan with 37.2%.
The authors are the only states to shrink in size in 2019, despite the governments of Saskatchewan and Prince Edward Island growing beyond optimal levels throughout the study period, 0.5 percent points and 3.1 percent points, respectively. I found that.
Alberta, on the other hand, saw the largest increase in government size by 7.3 percentage points compared to 2007 levels. Newfoundland and Labrador scored the second spot with 5.5 percent points, followed by Nova Scotia with 3.3 percent points.