Recently we They were learning That since 2018, the number of civil servants in Quebec has increased by 13%, while the number of jobs in the private sector, including the self-employed, has decreased by about 0.05%, that is, 1,600 fewer jobs in the same period. However, this trend is not observed in Ontario or at the Canadian level. Just like clapping on board while landing, this is a strict Quebec trend that’s been going on for years. In this context, nearly one in four employees in Quebec now works for the government.
The consequences of business in Quebec are clear: it must compete with the government to attract employment. The main difference is that the government can always offer more than the private sector – sometimes in wages, but often in working conditions, pension systems, etc. – To attract employees. In fact, unlike corporations, they do not have the objective of being profitable at all times in order to survive, or at least they do not have the same budget and performance constraints as the private sector. Unable to fill vacant positions, some companies must therefore refuse contracts or reduce their operations in order to survive with fewer employees, to the detriment of Quebec’s prosperity. After all, it is entrepreneurs who create wealth, not the state.
Not only does this competition for workers amplify the labor shortage, but each additional person the state employs is costing Quebec taxpayers more. Let’s not forget that this is still the most taxed in North America, and that Secretary Gerrard said in March that the structural deficit would increase by more than $6.5 billion due to the epidemic. The state of public finances requires reconsideration of the importance of many public sector job creation programs and government spending.
Lots of public investment
One factor that explains the poor job prospects in the private sector, other than the increase in public service hiring, is the government’s excessive investment in Quebec. Since 2014, public investment has grown nearly four times faster than private investment. The result of this excessive public investment is what is called in the economy the crowding-out effect: the government substitutes a portion of private demand for public demand.
It’s the same story for the federal government. Canada is a member of the Organization for Economic Co-operation and Development It has the highest level of public investment, and it also has the lowest level of private investment.
As government spending continues to grow and the size of the country explodes, we find ourselves in a labor shortage, almost 195,000 vacancies in Quebec. We have the right to ask ourselves why the state occupies an increasingly important position with regard to the private sector. Its spending goes beyond just job creation by businesses, as well as increasing public debt, at both the federal and regional levels. After all, nothing is free in this low world and this debt will eventually have to be repaid, either by raising taxes or by reducing services to the population.
The analysis of the numbers is clear: different levels of government interfere excessively in the economy, creating harmful effects for everyone. Governments need to withdraw from the economy and allow companies to create wealth and innovate. It is one of the best ways to create long-term prosperity while alleviating labor shortages.
Olivier Rancourt, Economist at the Montreal Institute of Economics
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