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Business Environment Profiles - Canada

Government consumption and investment

Published: 16 April 2025

Key Metrics

Government consumption and investment

Total (2025)

645 $ billion

Annualized Growth 2020-25

3.2 %

Definition of Government consumption and investment

This indicator measures the total value of services produced by federal, provincial and local governments (e.g. education and national defense) as well as investment in fixed assets (e.g. construction, software, etc.). Each component is valued at the cost of production, making this measure analogous with total government spending minus subsidies, interest payments and transfer payments. Historical data for this report is sourced from Statistics Canada and is presented in chained 2017 dollars.

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Recent Trends – Government consumption and investment

Over the past several years, Canadian government spending has undergone some shifts, primarily influenced by the pandemic and subsequent recovery efforts. Initially, there was a marked increase in spending to address the immediate health crisis, provide economic relief to individuals and businesses, and support essential services. This surge reflected a strategic policy response aimed at mitigating the pandemic's adverse effects on the economy and society, leading to a temporary expansion of the government's role in key sectors.

Following the initial crisis response, Canadian government spending has focused on supporting economic recovery and addressing longer-term societal needs. Investments in infrastructure projects, green energy initiatives, and social programs aimed to stimulate economic growth and create jobs. Additionally, the government prioritized addressing inequalities and promoting inclusivity through targeted spending on programs that support vulnerable populations and promote social justice. These investments reflect a commitment to building a more resilient and equitable society in the wake of the pandemic.

Looking ahead to 2025, Canadian government spending is expected to gradually shift towards a more sustainable path. While maintaining essential services and continuing to support economic growth, there will likely be an increased focus on fiscal responsibility and debt management. This transition reflects a recognition of the need to balance immediate priorities with long-term fiscal sustainability. The government will likely prioritize investments that deliver long-term benefits and contribute to a more resilient and prosperous Canada while aiming to control overall spending growth.

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5-Year Outlook – Government consumption and investment

The outlook for Canadian government spending reflects a period of strategic recalibration, balanc...

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