British Columbia’s financial balance sheet is currently dripping in red ink. Mounting operating deficits have recently launched BC’s total taxpayer-supported debt to $99 billion.[i] Elected officials will find themselves hard-pressed to chart a path back to balanced budgets over the near term, especially in the middle of the U.S.-Canada trade war, a sluggish economy, and volatile small business confidence.
The path back to balance could become harder to chart as public sector collective bargaining applies pressure to provincial finances. Public sector compensation across all entities—not just the core public service—is equivalent to nearly 60% of the Province's annual budget. At present, negotiations between the government and the BC General Employees Union (BCGEU)—the principal union of BC’s public service—have broken off, with the BCGEU beginning a strike vote this week.
The impact of any agreement will be profound—a one percent increase in labour costs for all public sector workers will cost the government $532 million annually.[ii] Put differently, a 4% wage increase across the public sector is roughly equivalent to BC’s former carbon tax.
The size of BC’s public sector includes health authorities, public K-12 education, universities, and a variety of crown corporations, agencies, and contracted services that are all covered by collective bargaining agreements. The use of “me too” clauses in public sector bargaining often guarantee that any one concession offered by government is also guaranteed across all bargaining groups, a ripple effect that raises public sector costs across the board.
To pay for further wage increases beyond the BC government’s initial offer, the BCGEU has recently called on the BC government to implement new taxes, with proposals ranging from a new tax on land value, increasing taxes on high income earners, and increasing taxes on natural resources.[iii]
The costs of the current round of bargaining could not only affect BC’s capacity to respond to the economic threat of the US-Canada trade war but potentially increase financial pressure on businesses that are already struggling to navigate BC's high cost of doing business.
The timing for tax increases proposed by the BCGEU couldn’t be worse, as BC’s small business confidence index has fallen well below its historical average. 73 percent of small businesses identify tax and regulatory costs as the main constraint on their operations.[iv]
In the wake of Budget 2025, which reported a record $10.9 billion deficit, CFIB asked BC small businesses what measures they would prefer government take to balance the budget. An overwhelming 98% (net agree) wanted government to focus on economic growth, with a further 94% wanting more efficiency in the public sector—such as reducing its size or reallocating resources within departments (Figure 1). Another 79% wanted government to cut spending.
Small businesses were decisively opposed to increasing taxes to balance the budget, with 90% net opposed. Just 1% were strongly in favour of raising taxes.
Figure 1: Small Businesses Overwhelmingly Reject Tax Hikes, Favour Growth, Cuts to Spending, and Efficiency to Balance Budget
Source: CFIB, Your Voice Survey, final results, April 10-24, 2025, BC n = 275.
Question: To what extent do you support or oppose each of the following potential measures to balance the budget?
Overall, small businesses believe that the BC government has grown too large and too costly. At the same time, entrepreneurs are feel tapped out and are looking for a tighter government mandate that prioritizes efficiency and economic growth.
Since 2017, B.C.’s public sector compensation base has grown by $26.5 billion, outpacing inflation.[v] This is largely due to a significant increase in public sector employees. BC’s public sector headcount has grown by approximately 210,000 employees, an increase of 55 percent.
Recent analysis by the Business Council of British Columbia further confirms that the majority of jobs gained compared to pre-pandemic trends have been in BC’s public sector at the expense of private sector jobs growth. BC needs a thriving private sector in order to generate government tax revenue—including from private sector wages, business profits, and sales taxes. Using economic growth to balance the budget is the preferred path for BC small business owners, as shown by CFIB’s survey data.[vi] However, consistently increasing revenue demands from a growing public service risks stymying that growth, leading to a vicious cycle of spending, deficits, and taxation.
If BC’s government turns towards a growth mindset, it will require critical examination of what areas within the public sector are experiencing rapid growth, what it is costing taxpayers, and whether that growth is meeting the public’s needs. But how do we take stock of public sector growth and identify what sectors and subsectors are putting pressure on the government purse?
To further unpack trends in BC’s public sector growth, CFIB has analyzed data provided on BC’s Public Sector Compensation Base, available through the BC Data Catalogue. This data provides a forecast of not only trends in employment and labour costs by public service area, but also by detailed subsector.[vii] This data is useful for measuring trends in public sector growth and labour costs across all publicly funded organizations, not just the core public service.[viii]
According to the public dataset, BC’s provincial public sector has seen a large expansion since 2017. Total labour costs in B.C.’s public sector—including all employee salaries and benefits—have nearly doubled rising from $26.7 billion in 2017 to $53.2 billion in 2024 (Figure 2).
Available data also shows how significant growth of the overall public sector has occurred outside of the core public service. From 2017 to 2024, BC added 14,663 public servants, an increase of 45%. During the same period, the total number of public sector employees grew by 55%, from 383,527 in 2017 to 593,547 in 2024. Annual budgets typically do not include these non-core positions in reporting, despite being taxpayer funded. This reduces public oversight into public sector spending and size.[ix]
Figure 2: Total labour costs for the public service have nearly doubled since 2017
Sources: British Columbia Data Catalogue, Public Sector Compensation Base – 2017-19, 2021-23 editions; British Columbia, Public Sector Compensation Base, https://www2.gov.bc.ca/gov/content/governments/services-for-government/public-sector-management/compensation/compensation-base (retrieved July 29, 2025)
Figures 3a and 3b show the annual headcount and total labour costs for each sector represented in the Compensation Base Survey, including initial and final amounts from 2017 to 2024. Some of these increases have come from government policy changes, including expansions in healthcare, housing, and social services. However, as later analysis shows (Figures 4 and 5), these increases have also resulted in expansions of management, suggesting that the bureaucracy has not become more efficient amid this rapid expansion.
Figure 3a: Healthcare has seen the largest growth of public sector employees, while colleges, institutes, and teaching universities have grown the least.
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2017-19, 2021-23 editions; authors’ calculations.
British Columbia, Public Sector Compensation Base, https://www2.gov.bc.ca/gov/content/governments/services-for-government/public-sector-management/compensation/compensation-base (retrieved July 29, 2025)
Of the 210,020 additional public sector employees added between 2017 and 2024, a significant portion—91,799 workers—have been in healthcare (Figure 3a). This represents a $14.4 billion increase in total labour costs (Figure 3b). Other significant increases have come via community social services (51,070 workers, $2.7 billion), public education (20,646 workers, $3.0 billion), and the core public service (14,663 workers, $2.1 billion).
Figure 3b: Healthcare has seen the largest growth in total labour costs, while colleges, institutes, and teaching universities have grown the least
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2017-19, 2021-23 editions; authors’ calculations.
British Columbia, Public Sector Compensation Base, https://www2.gov.bc.ca/gov/content/governments/services-for-government/public-sector-management/compensation/compensation-base (retrieved July 29, 2025)
Available subsector-level data from 2019 to 2023 reveals that total labour costs for management have outpaced the number of managers and excluded employees added to the public sector (figure 4). This denotes substantial pay increases for existing managers, though total management numbers continue to expand. Total compensation for managers and union exempt positions across the public sector reached at least $5.7 billion annually in 2023, increasing by at least $1.7 billion from 2019.[x]
Figure 4: Colleges and healthcare have seen the most significant growth in management labour costs.
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2019, 2021, 2022, 2023 editions; authors’ calculations. * ‘Research Universities’ excludes 2019 data due to a labelling error in the source data that risks double-counting.
Note: Hereafter, "Cost" denotes Total Labour Costs, including benefits.
Total labour costs for management and excluded employees have grown by 63% ($107 million annually) at public colleges, institutes and teaching universities. However, healthcare has seen the largest cost increase in gross terms, amounting to an additional $1.2 billion annually, or 52%. Core public service management costs have seen a 29% increase, totalling $238 million annually in additional costs.
Staffing ratios for management and excluded positions are inconsistent across different parts of the public sector. There is a high density of managers and excluded employees in both healthcare and the public service—a ratio of approximately one to every four other employees (figure 5).[xi] However, these ratios have remained relatively consistent since 2019. This is concerning, as it suggests that government has failed to find efficiencies at the management level as the public sector has expanded.
Figure 5: There is roughly one manager or excluded employee per every four other workers in healthcare and in the public service.
Source: British Columbia Data Catalogue, Public Sector Compensation Base, 2023; authors’ calculations.
These concerns magnify for the public service when labour cost ratios are considered instead of headcount. For every dollar that goes to management or excluded employees, three dollars go to all other workers. This compares to five dollars in healthcare and colleges, institutions, and teaching universities, or 22 dollars in research universities. Addressing management cost increases is one way that the government can pursue public sector savings while still delivering core services for British Columbians. The government should prioritise management as an area to seek public-sector efficiencies going forward.
Certain subsectors are seeing employment growth at significant rates. These include Community Social Services, Crown corporations, and Healthcare. Generally, labour costs have grown faster than the number of employees added, reflecting large across-the-board wage increases provided during the 2019 and 2022 public sector negotiating mandates (figure 6).[xii]
Figure 6: Community Social Services has grown the fastest out of all government service areas
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2019, 2021, 2022, 2023 editions, authors’ calculations.
The Community Social Services sector has experienced significant growth, with total labour costs nearly quintupling and the number of employees increasing by 310%. The composition of this subsector is complex and diverse. While Community Living BC provides the majority of funding for Community Social Services organizations, the sector also provides a wide variety of essential services that support the well-being of individuals, families, and communities, including childcare, mental health, homelessness, and food security programs. Within the sector, general services saw the largest increase, with labour costs up 124% and employees up 74% (Figure 7a). Similar growth trends were also seen in Indigenous services, non-CSSEA agencies, and community living services.
Figure 7a: General services growth leads the Community Social Services category
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2019, 2021, 2022, 2023 editions, authors’ calculations.
General services may include assistance with childcare, employment, or housing. Expansion of government initiatives within these categories likely explains the significant employment growth for the subsector.
Crown corporations have experienced significant growth since 2017, with total labour costs increasing by 93% and the number of employees rising by 62%. Available subsector-level data for 2019-2023 reveals that, for taxpayer-supported Crown agencies like BC Transit and BC Housing, total labour costs have doubled, and their workforces have grown by 81% over the same period (Figure 7b).
Figure 7b: Taxpayer-supported crowns have expanded significantly at the public expense
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2019, 2021, 2022, 2023 editions, authors’ calculations.
The substantial growth in taxpayer-supported crown payrolls is concerning because these wages put direct operating pressure on government finances, as opposed to self-sustaining crowns that have other non-tax revenue sources. Taxpayer-supported crown corporations do not report their workers as members of the core public sector, reducing overall transparency.
One potential source for cost increases may include BC Infrastructure Benefits, Inc. (BCIB), which runs BC’s Community Benefits Agreements (CBAs) by requiring select union membership for contractors seeking to work on public projects. By requiring CBA contractors to acquire their employees from BCIB’s government-run hiring hall, these construction workers may show up on the Compensation Base Survey as public sector employees.[xiii] These projects have been controversial for substantially increasing the cost of infrastructure projects compared to an open bidding process, due to restricting available labour membership to a select number of building trades unions.
The healthcare sector has experienced substantial growth, with labour costs more than doubling and the total number of employees rising by 55% since 2017. Available subsector-level data from 2019 to 2023 reveals that management costs and headcount have grown faster than almost every other subsector, including doctors. Nurse compensation has expanded significantly, but overall employment increases amongst nurses remains lower than the increase in managers.
Union exempt positions, despite only seeing a 6% increase in headcount, have seen a remarkable growth in total compensation of 56%, greater than doctors and nurses. Exempt positions typically include senior managers and executives.
With hundreds of thousands of British Columbians still unable to find a family doctor despite recent hiring, the provincial government should concentrate efforts to stem the growth of management in favour of focusing on frontline medical workers. There are some signs that this may be happening, as the Public Health Services Authority (PHSA) recently confirmed cuts to 117 excluded positions covering administrative and management roles.[xiv] This comes amid a review of administrative bloat at the PHSA.
Figure 7c: Healthcare managers and union exempt positions have seen outsized growth in either pay or hiring, while ambulance paramedics and dispatchers have declined
Source: British Columbia Data Catalogue, Public Sector Compensation Base – 2019, 2021, 2022, 2023 editions, authors’ calculations.
Among all subsectors, the Community Health Bargaining Association saw a 44% increase in employees and a 72% rise in labour costs. Management staff numbers grew by 36%, while the Facilities Bargaining Association experienced a 33% increase in employees and a 64% increase in labour costs. The Nurses Bargaining Association also saw labour costs rise by 55%. Overall, both staffing levels and labour expenses have grown significantly across all major groups within the healthcare sector.
The ambulance paramedics and dispatcher’s subsector, despite seeing an overall wage increase, has seen a reduction in headcount by 7% since 2019, equating to 300 positions. This decline in critical frontline services stands in stark contrast to increases management and union exempt positions.
A lean and efficient public sector doesn’t mean an absent one, but instead one that focuses first on delivering results and services for the public. The growing disconnect between private sector growth and demographic realities raises important questions, pointing to a public sector trajectory that may not be fully aligned with broader economic and structural trends.
Overall public sector growth between 2017 and 2024 is sharply contrasted against a mere 15.5% growth in population within BC. The private sector workforce saw a 9.7% growth whereas the public sector saw a significantly larger increase of 36.1% growth.
As publicly available data highlights, there may be opportunities to pursue efficiencies and consolidation at the management and union-exempt levels across multiple sectors. Further transparency and a critical examination of crown corporations hiring practices are also required.
Ultimately, as the BC government continues negotiating collective agreements across the public sector, it should take care to align the expansion of public service provisions with economic growth.
Footnotes:
[i] British Columbia, Public Accounts, 2024-25
[ii] British Columbia, BC Public Sector Bargaining Update, https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/services-policies-for-government/public-sector-management/psec/2025-bargaining-update.pdf, retrieved August 7, 2025
[iii] BCGEU, “An investment in public safety and a healthy economy,” July 2025
[iv] CFIB, Your business outlook survey, February 2009 – July 2025
[v] British Columbia, “Public Sector Compensation Base,” retrieved July 29, 2025 and May 18, 2017, via Internet Archive, https://www2.gov.bc.ca/gov/content/governments/services-for-government/public-sector-management/compensation/compensation-base
[vi] CFIB, Your Voice Survey, final results, April 10-24, 2025, BC n = 275.
[vii] Sector-level data was retrievable for the years 2017-19 and 2021-24, while subsector data was available for 2019 and 2021-23 only.
[viii] Public Sector Compensation Base is based on data collected through the Compensation Base Survey (CBS). The CBS is conducted by the PSEC Secretariat in the fall of each year to provide as accurate a picture as possible of the total cost of BC public sector compensation. Once the survey is completed, the data is reviewed to ensure it is reliable and comparable across public sector employers. Assumptions and methodologies are refined as necessary and the data is then used to project the compensation base at the beginning of the fiscal year to what it will be as of April 1, in any given year.
[ix] British Columbia, Budget 2025, page 152.
[x] Management and Union Exempt Categories are only available for the following sectors: Colleges, Institutes and Teaching Universities, Health, Public Education (K-12), Public Service, and Research Universities. Crown corporations and community social services do not distinguish between management and frontline services in the available dataset.
[xi] Public sector roles were categorized by subsector within each sector. All roles labeled as management or union exempt are classified as management, while all other roles were classified as “frontline,” representing those that deliver direct services to the public. However, not all excluded employees may be managers.
[xii] British Columbia, Public Sector Bargaining Mandates and Agreements, https://www2.gov.bc.ca/gov/content/employment-business/employers/public-sector-employers/public-sector-bargaining/mandates-and-agreements, retrieved August 7, 2025.
[xiii] BCIB’s annual service plan states that “A majority of the Wages & Benefits represents those employees that perform construction work on major infrastructure projects.”
[xiv] J.J. Adams, Vancouver Sun, “B.C. health authority chops 57 jobs, 61 vacancies eliminated as more cuts to come: report,” https://vancouversun.com/news/bc-health-authority-chops-57-jobs-more-cuts-to-come-report.