Reducing the growth in public spending will be hard
The following chart shows economic growth in Canada on a per capita basis during the ‘boom’ years of 1999 to 2008. I put this chart together to illustrate an important point. The government sector grew strongly during that decade but there are wide variances from province to province in the relationship between private and public sector GDP growth. Predictably, AB, SK and NL grew public spending significantly faster than the national average over the period but that was in large part a response to the booming private sector economy. New Brunswick, by contrast, grew its public sector spending in spite weak private sector GDP growth over the period.
GDP Per Capita Growth 1999-2008
|Government Sector||Rest of the Economy|
|Newfoundland and Labrador||58%||221%|
|Prince Edward Island||58%||45%|
Source: Based on Statistics Canada CANSIM Table 381-0015 Provincial gross domestic product (GDP) at basic prices in current dollars.