Every election, you hear the same promise. Candidates stand on a stage and tell you they’re going to create jobs. And it sounds good. Jobs mean income, stability, and families paying their bills. Who could argue with that?
Here’s the problem: governments cannot create real, sustainable jobs. Not in a way that adds value to the economy. Not in a way that pays for itself. And when they try, it costs everyone — including you.
Let me show you what the right way looks like, what the wrong way looks like, and why this matters to every business owner in Canada.
Two Towns, Two Approaches
Picture two small Canadian towns. Same population, same geography, same starting conditions. Both struggling ten years ago.
Town A’s new mayor ran on a jobs platform. So he hired. A new economic development office — twelve staff. A new licensing department — six more. A new small business advisory board, staffed by government employees. He announced he’d created 24 new jobs.
Town B’s mayor did something different. She called the local business association and asked one question: what’s stopping you from growing? The answer was red tape, slow permits, and confusing licensing. So she cut permit approval time from 90 days to 14, created a single business licence instead of four, and made the rules consistent. She didn’t hire a single new government employee.
Three years later: Town A has a growing payroll, a growing budget, and a shrinking tax base. Town B has eleven new businesses, 200 private-sector jobs, and a tax surplus used to fix the roads.
Same problem. Completely different approach. Completely different results.
What Governments Are Actually For
Let’s be clear about what governments are supposed to do. They exist to create the legal, physical, and social infrastructure that lets businesses operate safely, fairly, and confidently. That’s the job.
In practice, that means:
Laws and contract enforcement. Commerce is impossible without them. If a supplier breaks a contract, you need recourse. If someone steals from you, there are consequences. Without enforceable rules, nobody invests in anything.
Infrastructure. Roads, ports, bridges, power grids, internet. Your delivery truck needs a road. Your employees need a way to get to work. Government builds and maintains the physical layer that business runs on.
Protections. Property rights, intellectual property, consumer protection, competition law. These aren’t bureaucratic annoyances — they’re the rules of the game that make it worth playing.
Targeted funding, in specific cases. When a manufacturing sector needs to retool, or a tech cluster needs early infrastructure, carefully targeted investment can bridge a gap. But this is the exception, not the rule — and it should always be temporary. That’s what banks are for.
When governments do these things well, businesses grow. And growing businesses do what governments never can: they create jobs that pay for themselves.
How the System Is Supposed to Work
Here’s the value chain when the system is healthy.
A business exists to add value to other people. Customers pay for that value. A portion of those payments becomes sales tax, flowing to government.
The business pays corporate taxes on its profits. It pays capital gains taxes when it sells assets. It pays property taxes on its facilities. It pays employment taxes on every person it hires. Every employee pays personal income tax. Every owner pays personal income tax. And everyone spends their money — which gets taxed again.
All of that goes into the pot. The pot pays for healthcare, education, policing, roads, and the military. The pot is the social safety net.
Some business owners do very, very well. Good. They spend their money — and they pay tax on every dollar they earn and every dollar they spend. The more successful the business community, the fuller the pot. The fuller the pot, the better the services everyone depends on.
This is the system working as designed. Business is the engine. Government is the road.
The Wrong Way: Governments Trying to Create Jobs Themselves
Now here’s what happens when governments get this backwards.
Usually it starts with good intentions. High unemployment. Political pressure. An ideology that sees government as the answer to every social problem. So instead of making it easier for businesses to grow, the government starts hiring.
New departments. New advisory boards. New regulatory bodies. New managers to manage the managers. New compliance officers to ensure the compliance officers are complying.
These aren’t jobs that add value. They don’t produce goods. They don’t serve customers who chose to pay for a service. They exist to manage, police, and often slow down the jobs that do create value.
Think about the last government process you navigated as a business owner. The licensing application. The permit renewal. The regulatory filing. The people on the other side of those processes — are they making your business better? Are they creating anything you’d willingly pay for?
Some government functions are genuinely necessary. But the question is always whether the size of the apparatus is proportional to the work that actually needs doing — or whether it’s grown far beyond that.
The Brutal Math of Bureaucracy
In Canada, government workers are typically paid above the private-sector average, with benefit and pension packages most private businesses can’t match. That’s not just a budget item — it distorts the labour market. It pulls workers out of the private sector. It raises wage expectations that small businesses struggle to meet.
And here’s the number that should stop you cold: every new government hire requires approximately 8–9 private-sector workers to fund their salary through taxes.
That means every bureaucrat who gets hired effectively cancels out the economic contribution of 8 or 9 people working in the real economy. Money that should be going toward hospital technology, or road resurfacing, or hiring another physician — it’s going to an administrative layer that’s adding nothing to the pot.
Instead of filling the pot, each new hire drains it. When the drain gets big enough, governments raise taxes to cover the gap. Higher taxes slow business growth. Slower business growth means fewer taxpayers and less revenue. Which means the pot shrinks further. It’s a cycle that only runs in one direction.
Why the Bureaucracy Never Gets Smaller
Here’s what really makes this a problem: once bureaucracy grows, it almost never shrinks. And there are three reasons why.
No measurable outcomes. In business, you know if someone is doing their job — the numbers move, customers come back, revenue grows. In a government department, success is often just the absence of visible failure. You can’t identify who’s contributing and who’s coasting, so you can’t cut the right people.
Hiring that protects its own. When hiring prioritizes anything other than competence — political considerations, equity targets applied rigidly without judgment — you create a workforce that’s very difficult to let go of. Attempting to manage poor performers out becomes legally risky. So instead, nobody leaves.
Nobody ever leaves voluntarily. Government jobs offer extraordinary security, predictable raises, and pension benefits that simply don’t exist in most of the private sector. Why would anyone leave? So every hire becomes permanent. Every department created becomes a line item forever. This is what I call More’s Law: the bureaucracy only ever grows. It doesn’t shrink.
The result, for you as a business owner, is that you’re operating in a system that compounds its own inefficiency over time. You buy five licences to do what should require one. Your passport renewal takes six months. You pay more in taxes and feel like you’re getting less in return. That’s not an accident. That’s More’s Law playing out.
What This Means If You’re Running a Business
You didn’t create this environment. But you’re operating in it.
You’re dealing not just with your own costs and competition — you’re dealing with a growing public payroll that competes with you for workers, drains the revenue base the whole system depends on, and generates the regulatory friction that slows you down.
That’s the reality. But the fundamentals still work.
When you add value, you get paid. When you grow, you contribute. When you hire, you create something real — something that funds the system the right way. Every employee you bring on, every supplier you pay, every customer you serve — value is being added at every step. You’re not just building a business. You’re keeping the pot full for everyone.
Good governments understand this. They create the environment, laws, and systems that help businesses thrive — and that tax revenue pays for our hospitals, schools, and roads.
Bad governments shrink the pot by growing the bureaucracy. And unfortunately, once that process starts, it’s very hard to reverse.
Your job is to build anyway.
The Short Version
Governments don’t create jobs. Governments create the conditions that allow businesses to create jobs.
The right approach: clear laws, solid infrastructure, sensible protections, and occasionally targeted funding — giving businesses what they need to grow and generate the tax revenue that funds everything else.
The wrong approach: hiring bureaucrats to boost employment numbers or satisfy an ideology — creating workers who consume the pot instead of filling it.
Every bureaucrat requires 8–9 private-sector workers to fund their salary. Every unnecessary regulation is friction on the engine that drives the whole economy. And once the machine grows, it rarely shrinks.
Business is the engine. Government is the road. When the road starts competing with the engine, we all pay for it.
In our next episode, we’ll get specific: what does a bloated bureaucracy actually cost you as a Canadian business owner? We’ll put real numbers to it — and talk about what you can do to operate efficiently in a system that isn’t always on your side.
Chris Cooper is the host of BusinessIsGood, a podcast for Canadian small business owners. New episodes at businessisgood.com.
Website – https://businessisgood.com/
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