Wages and Inflation by Province

Despite Alberta’s booming economy, Albertans are making about the same amount per hour as they were a year ago. Specifically, the resource boom has increased prices as much as wages.

Statistics Canada released January’s inflation numbers today. It is interesting to compare them with January’s wage numbers. Nationwide, average hourly wages increased by 2.2% and consumer prices rose by 1.2% between January 2006 and January 2007. These modest figures hardly support the Bank of Canada’s claim that “the Canadian economy was operating at, or just above, its production capacity.” However, at least they reflect a 1% improvement over the past year, on average, for Canadian workers.

The breakdown by province is particularly interesting:

                              Wages   Inflation   Real Gain

Newfoundland      1.2%      1.1%          0.1%

PEI                            5.9%      1.1%         4.8%

Nova Scotia           3.5%      0.7%         2.8%

New Brunswick    2.9%     0.3%          2.6%

Quebec                    1.2%      0.6%         0.6%

Ontario                   1.4%      0.3%         1.1%

Manitoba               4.4%      1.7%          2.7%

Saskatchewan      3.8%      1.4%          2.4%

Alberta                   4.1%      3.9%          0.2%

British Columbia 3.4%      2.2%          1.2%

Although these numbers bounce around a bit from one month to the next, for a few months they have indicated that wages are not improving much relative to inflation in Newfoundland, Quebec, and Alberta. The big gains seem to be in the Maritimes, Manitoba, and Saskatchewan. Since these provinces have wages below the national average, larger proportional increases may be easier to achieve. Manitoba and Saskatchewan workers appear to be reaping some spin-off benefits from the western boom without much of the associated inflation.

The Sun newspapers in Ottawa, Toronto, Winnipeg, Edmonton, and Calgary reported on these trends. The December inflation numbers cited below differ from the January ones above.

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February 20, 2007 Where the jobs are

By ANNE HOWLAND, SUN MEDIA

Jobs may be plentiful in oil-rich Alberta, but anyone looking for the best Canadian opportunities combining good pay with a low cost of living might be better off in Saskatchewan, parts of Ontario or PEI.

“Alberta has seen huge job growth,” said Erin Weir, economist with the Canadian Labour Congress.

However, while employers struggle to fill vacancies, average wage increases have not kept up with inflation, meaning many workers in Alberta are earning less than they were a year ago.

For the complete article, click here.