Study focuses on Atlantic Canada and finds a significant gap between the two sets of workers
Government employees in Atlantic Canada are earning markedly more than their private sector counterparts, sharpening an already live debate about public sector compensation and long‑term sustainability for taxpayers.
A new analysis from the Fraser Institute finds that, after adjusting for a range of factors including age, education, occupation and industry, government workers in the Atlantic provinces enjoy an average wage premium of 11.9% over similar workers in the private sector. When additional differences such as unionization are taken into account, the wage advantage for government employees narrows but still remains at 6.3%.
While the headline number focuses on wages, the study underlines that the public sector advantage extends well beyond paycheques.
Across the Atlantic provinces, public sector workers are far more likely to participate in registered pension plans than workers in the private economy. Fewer than three in ten private sector employees had coverage under such plans in 2018, compared with more than eight in ten in the public sector. Among those with a plan, defined benefit arrangements dominate in the public sector, whereas defined contribution and other designs are more prevalent in the private sphere.
"Bringing government-sector compensation in line with the private sector would not only help governments in Atlantic Canada control spending without reducing services, but would also maintain fairness for taxpayers," said Jake Fuss, director of Fiscal Policy at the Fraser Institute.
For advisors with a book that includes both public‑ and private‑sector households, the divergence can reshape retirement projections, savings strategies and risk conversations.
For example, public servants with defined benefit pensions and above‑market wages may be able to meet retirement income targets with lower levels of personal savings than their private‑sector peers. At the same time, their retirement security is more directly tied to the fiscal health of provincial and federal governments and to the political decisions that govern plan funding and benefit design.
Private sector clients, by contrast, are more likely to rely on RRSPs, TFSAs and group defined contribution or savings plans to close the gap left by less generous workplace pensions or no pension at all. The income differential highlighted in the Atlantic study reinforces the need for more aggressive or earlier saving among those outside the public sector who want to achieve comparable retirement lifestyles.
A separate Fraser Institute study on compensation across Canada reports that government workers enjoyed an average 26.1% wage advantage in 2024 before adjustments, and a 4.8% premium over comparable private sector workers after controlling for factors such as age, gender, education and occupation. That national picture also points to earlier retirement, more personal leave and greater job security in the public sector.
Median employment earnings in Atlantic Canada lag those in nearby US jurisdictions; one Fraser Institute comparison found median earnings of $29,150 in Atlantic Canada versus $44,236 in New England, a gap of more than $15,000. Against that backdrop, a relatively privileged public sector can intensify disparities between households with secure government employment and those dependent on more cyclical private‑sector jobs.
