Consider:
Dentist - private sector, provides service, earns income, pays taxes.
Doctor - public sector, provides service, earns income, pays taxes.
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The CRA doesn't care whether the dollars are public sector or  private sector.
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The doctor, the dentist, the iron ore miner, the piano teacher, and the hamburger joint employee all earn wages and pay taxes.  The fact that some of them provide goods and services in the private sector, and some provide goods and services in the public sector is irrelevant.  The public sector employees provide demand for private sector goods and services, and vice versa.
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Whether it is wise for the public sector to be 20%, 40%, 60%, 80% or 100% of the economy is a valid question.
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However, the suggestion that goods and services gain a special nobility because they are produced by the private sector is nonsense.
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Is potash produced by a crown corporation not potash, just the same as if produced by a private sector company?