Alberta had the smallest government share of the economy in Canada in 2024, even as government spending increased across all provinces, according to a study released by the Fraser Institute.
The study found total government spending in Alberta — including federal, provincial and municipal — was equal to 30.4 per cent of the province’s economy, the lowest in the country.
Nationally, government spending represented 43.6 per cent of the economy in 2024.
The study measures the size of government using total consolidated spending across all levels of government as a share of gross domestic product.
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Government share of economy rises across Canada
Government spending as a share of the economy increased in all 10 provinces between 2019 and 2024, the study found.
From 2007 to 2024, spending increased in nine of 10 provinces.
Across the country, the size of government ranged from 30.4 per cent in Alberta to 61.2 per cent in Nova Scotia in 2024.
The study found Atlantic provinces recorded the highest levels of government spending relative to their economies, while western provinces had the lowest.
The study found Alberta maintained a gap of nearly 10 percentage points compared with Saskatchewan, the next lowest province.
Growth since pandemic period
The report tracks changes through the COVID-19 period and afterward.
Nationally, the size of government increased from 40.0 per cent of the economy in 2022 to 43.6 per cent in 2024.
The study shows government spending rose sharply during the COVID-19 pandemic, declined in subsequent years, and has since increased again.
Between 2022 and 2024, nine provinces saw increases in government spending relative to their economies, while Nova Scotia remained unchanged.
The report notes that changes in this measure reflect both government spending and the size of the economy.
Alberta growth smaller than most provinces
While Alberta recorded the lowest overall share of government spending relative to its economy, the study shows it has still increased.
Between 2019 and 2024, government spending relative to the economy in Alberta rose by 0.8 percentage points.
The study shows this compares with increases of more than five percentage points in provinces including Newfoundland and Labrador and Manitoba over the same period.
Public sector employment trends
The study also examines public-sector employment as a second measure of government size.
In 2024, public-sector workers accounted for 21.5 per cent of total employment in Canada.
Alberta had the lowest share at 18.0 per cent.
Public-sector employment as a share of total employment increased in every province from 2007 to 2024, according to the report.
From 2019 to 2024, public-sector employment rose in all provinces except Alberta, where it declined.
The report states public-sector job growth has outpaced private-sector growth in recent years.
Distribution of spending
The report also breaks down how governments spend.
In 2024, 57.9 per cent of government spending in Canada went toward goods and services, 27.2 per cent to transfer payments, 7.0 per cent to capital transfers and subsidies, and 7.9 per cent to interest on debt.
The study found the distribution of spending has remained relatively stable over time, despite fluctuations during the COVID-19 pandemic.
Research cited in report on “optimal” size
The report cites previous research suggesting government spending between 26 and 30 per cent of the economy is associated with maximizing economic growth and social progress.
It states that all provinces exceeded that range in 2024.
The Fraser Institute is a Canadian public policy research organization.
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