PERSPECTIVE: Focus on Nova Scotia government’s pay packets to save money

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By Ben Eisen and Alex Whalen

Nova Scotia, like every Atlantic province, faces significant fiscal challenges: an aging population, heavy reliance on federal transfers, and higher interest rates on existing government debt than most other provinces.

To help manage these risks (and others that may arise in the future), the Houston government should exercise spending restraint to put the province in a better fiscal position. That said, any provincial government serious about spending restraint must pay careful attention to the government wage bill — essentially, the amount of money spent on the salaries and benefits of government employees.

If governments can find ways to spend less on employee compensation, they can save taxpayer money without compromising the quality of public services. But according to new research published by the Fraser Institute, governments in Atlantic Canada may be overshooting the mark and (on average) paying a premium to employees above and beyond what comparable workers in the private sector earn. Moreover, non-wage benefits are more generous in government than in the private sector.

First, let’s look more closely at wages. While there’s not enough wage data for Nova Scotia alone to glean a reliable estimate for the province, the study estimates that government workers across Atlantic Canada earn 11.9 per cent (on average) more than similar private-sector workers. This analysis accounts for many variables, including education attainment and job tenure. Clearly, regionwide, there’s a substantial pay premium between government and private-sector workers.

And while these data include federal, provincial and municipal employees, the provincial…

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