Canada is at a crossroads as it grapples with a growing bureaucratic state. The government has been consuming an increasing share of the economy, leading to a productivity crisis and regulatory uncertainty. This environment has discouraged entrepreneurs and investors alike. However, a potential turning point has emerged. For the first time in a decade, the federal public service has seen a reduction in size, shedding nearly 10,000 jobs over the past year.

This reduction marks a small but significant step towards addressing the rapid growth of the Canadian government during the Trudeau administration. Ideally, the public service should expand only as necessary to support a growing economy and population. This approach is essential for an efficient government that can effectively fulfill its core responsibilities. Yet, many officials in Ottawa and across the provinces seem to believe that government should create jobs out of thin air, a belief that is detrimental to the economy.

From 2016 to 2024, the federal public service workforce increased by 42 percent. In contrast, government expenditures ballooned to nearly 43 percent of GDP in 2023, significantly higher than the 36 percent seen in the United States. This surge in spending has coincided with longer surgical wait times and rising crime rates, indicating a troubling trend of prioritizing quantity over quality in government services.

In a recent column, Andrew Coyne highlighted the dramatic increase in staffing at the Canada Pension Plan Investment Board. Two decades ago, the board employed just 150 people at a cost of $118 million annually. Today, that number has skyrocketed to over 2,100 employees, with costs exceeding $6 billion, yielding only mediocre results.

Critics argue that former Prime Minister Justin Trudeau's government transformed the public service into a form of white-collar welfare. Instead of fostering economic growth and attracting investment, the Liberals appeared to focus on job creation within the public sector. Many of Trudeau's top advisers and staffers previously worked under Dalton McGuinty, Ontario's premier from 2003 to 2013, during which public-sector jobs increased by nearly 28 percent, while private-sector growth lagged at less than six percent.

This trend continued during the pandemic. Between 2019 and 2023, federal and provincial government employment rose by 13 percent, while private-sector jobs grew by less than six percent. In total, 490,000 new public service positions were created. While public works can effectively boost employment during economic downturns, the COVID-19 pandemic led to an influx of unnecessary managerial roles rather than essential infrastructure projects.

British Columbia has emerged as a notable example of this bureaucratic expansion. Between 2019 and 2023, government jobs in the province increased by 22 percent, while private-sector job growth stagnated at just 0.5 percent. The province has also faced a downgrade in its credit rating for the fourth time in four years, reflecting concerns over its structural budgetary shortfall.

As health-care wait times grow and public-school class sizes increase, British Columbians are seeing little return on their tax contributions. The province's struggles mirror broader issues affecting Canada as a whole. Despite the challenges, Canada possesses a wealth of critical minerals and natural resources that could drive economic growth. However, this potential can only be realized if both federal and provincial governments commit to facilitating projects in the national interest.

To become a leading supplier of critical minerals globally, Canada must shift its approach. The government needs to collaborate with the private sector rather than encroach upon it. Infrastructure development is crucial for resource extraction in remote areas, and public investment in this area could create thousands of jobs for blue-collar workers who have been largely excluded from the recent public hiring surge.

Ultimately, a bureaucratic regime will not lead to a prosperous future for Canada. Addressing this issue will require difficult decisions, but it is essential for creating a fairer and more prosperous nation.