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Median wages and salaries lower in every Canadian province than in every U.S. state

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From the Fraser Institute

There’s a growing consensus among economists that the federal government and several provincial governments over the past decade have not enacted enough policies that encourage economic growth. Consequently, Canadians are getting poorer relative to residents of other countries including the United States. In particular, their ability to purchase essential goods and services such as housing and food—in other words, their standard of living—is declining relative to our neighbours to the south.

In fact, according to our new study, among the 10 provinces and 50 U.S. states, median employment earnings—that is, wages and salaries— in 2022 (the latest year of available data) were lowest in the four Atlantic provinces, followed by Manitoba, Saskatchewan, Quebec, Ontario, British Columbia and Alberta. So, the median employment earnings of workers were lower in every Canadian province than in every U.S. state.

Were Canadian provinces always in the basement? Pretty much. In 2010, while only 12 U.S. states reported higher median employment earnings than Alberta, the other nine Canadian provinces ranked among the bottom 10 places. However, the important point is that from 2010 to 2022, Canadian provinces have fallen even further behind as many low-ranking U.S. states substantially improved.

In 2010, the per-worker earnings gap (in 2017 Canadian dollars) between Louisiana, a middle-ranking state, and the nine lowest-ranked Canadian provinces varied from $4,650 (in Saskatchewan) to $15,661 (Prince Edward Island). By 2022, a typical mid-ranking state such as Tennessee was out-earning all provinces by a range of $6,770 (in Alberta) to $16,955 (P.E.I.). In other words, by 2022, not only were workers in all U.S. states out-earning workers in all Canadian provinces, the gap had grown.

Another example—Alberta and Texas are the two largest oil-producing jurisdictions in their respective countries, yet Albertans, who out-earned Texans in 2010, saw their lead of $3,423 per worker become a deficit of $5,254 by 2022.

It’s a similar story for B.C. and Washington, which are geographically proximate and have similar-sized populations. While B.C. experienced strong growth in median employment earnings per worker over this period, it still lost ground relative to Washington—the gap grew from $10,879 in 2010 to $11,311 by 2022.

The change between Ontario and Michigan is even more striking. Again, they are geographic neighbours, have similar-sized populations and share a large auto sector, with Michigan’s lead over Ontario growing from $2,955 per worker in 2010 to $8,661 by 2022. The trends are similar when comparing Saskatchewan to North Dakota or the Atlantic provinces to the New England states; the gaps have only grown larger.

So, why should Canadians care?

Of course, everybody wants to make more money, so Canadians should want to know why workers in Mississippi and Louisiana make more than workers here at home. But there’s also a broader problem—people and capital can move relatively freely across the Canada-U.S. border, meaning this growing divergence in employment earnings has significant ramifications for the Canadian economy.

It could spur the ongoing migration of highly productive individuals, including high-skilled immigrants, who choose to move south. And encourage domestic and foreign firms to invest in the U.S. rather than in Canada. If these trends continue, they will exacerbate the earnings gaps between the two countries and potentially make Canada an economic backwater relative to the U.S. There’s also a significant risk these trends could worsen if the next U.S. administration increases tariffs on Canadian exports to the U.S., effectively abrogating the North American free trade agreement.

Clearly, to mitigate this risk and reverse the ongoing divergence in employment earnings—which largely determine living standards—between Canada and the U.S., the federal and provincial governments should implement bold and sweeping growth-oriented policies to make the Canadian economy more competitive. When Canada is more attractive to business investment, high-skilled workers and entrepreneurs, all workers will reap the rewards.

Authors:

Alex Whalen
Director, Atlantic Canada Prosperity, Fraser Institute
Lawrence Schembri
Senior Fellow, Fraser Institute
Joel Emes
Senior Economist, Fraser Institute
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Taxpayers Federation joins constitutional court fight regarding equalization expansion

Published on October 5, 2024

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From the Canadian Taxpayers Federation

Author: Carson Binda 

“Provincial governments want the courts to force Ottawa to give them even more money through the equalization program”

The Canadian Taxpayers Federation is joining the fight against Newfoundland and Labradors’ legal bid to increase federal equalization payments.

“Provincial governments want the courts to force Ottawa to give them even more money through the equalization program and taxpayers simply can’t afford to pay those bills,” said Carson Binda, B.C. Director for the CTF. “Taxpayers in so-called have provinces lose billions through the equalization program, but the payments don’t provide any long-term solutions in recipient provinces.

“The Canadian Taxpayers Federation is getting into this court fight to stop provinces from wasting even more taxpayers’ money on the equalization program.”

The Newfoundland and Labrador government is suing the federal government for more equalization money. Premier Andrew Furey is arguing a province should receive more tax dollars when it can’t afford to pay for new programs that other provinces implement.

“Taxpayers in the rest of Canada shouldn’t be on the hook for whatever new spending provincial politicians want to roll out,” Binda said. “Equalization already costs $25 billion a year – how much would the bill go up if Furey gets his way?”

The CTF filed an application to intervene in the Newfoundland and Labrador Supreme Court on Oct. 3, 2024. The CTF will argue that the Constitution does not give provinces standing to sue Ottawa for bigger equalization payments.

“Canada’s Constitution was never designed to grant provincial governments the authority to forcibly extract more tax dollars from taxpayers in other provinces,” said Devin Drover, CTF General Counsel and Atlantic Director. “We look forward to representing taxpayers in the court in this groundbreaking case.”

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Bruce Dowbiggin

Rogers Buys Out Bell In MLSE Shakeup: What Does It Mean For Fans?

Published on October 5, 2024

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There is an old joke that Canada has two seasons. Summer. And the months when the Toronto Maple Leafs lead the nightly Canadian sports networks. Perhaps it’s not that bad, but for those who don’t live in southern Ontario it often feels that way.

The reason, some said, for this Buds obsession was that both TSN and Rogers Sportsnet were part owners of the team through Maple Leaf Sports & Entertainment, a business giant created in 2011 when the warring telcos took equal  percentage shares in MLSE (Larry Tanenebaum took the final 25 percent, now 20 percent after selling a share to The Ontario Municipal Employees Retirement System.)

At the time the merger of Bell (TSN) and Sportsnet (Rogers) was compared to Twitter and Facebook deciding to partner. Such was the rivalry that many predicted it wouldn’t last. But it did—if you don’t include Stanley Cups. Until this past week when it was announced that, if approved, Rogers will buy out Bell’s stake in MLSE, leaving it with 75 percent ownership. The process should close next year.

Rogers also has an option to buy out Tanenbaum next year, giving it complete control of the Leafs, Raptors, Argos (CFL), Toronto FC (MLS) and Toronto’s ScotiaBank Centre, among other baubles.  (The new Toronto WNBA team is owned by Tannenbaum  and several partners.)

Why the deal? Why now? Despite the huge national audience for the NHL, NBA and MLB, the component parts are said to be underperforming in a time when equity in sports franchises is soaring. Rogers’ national NHL TV contract is a significant drain on revenues. The Blue Jays’ flopping in the standings has left them a “stranded money-losing team” whose value isn’t fully reflected within Rogers. The Raptors are now also-rans.

Bell’s debt rating was downgraded to one notch above junk in August by Moody’s Investors Service. While not to the point of selling pencils there’s a thought that packaged as a group under one owner, the teams will now be more lucrative and, possibly, lead to an IPO in the future.

What does it mean for sports fans? For now, not much change. TSN is getting a 20-year agreement to get 50 percent of the regular-season Leafs and Raptors games. So it will have an NHL/ NBA presence until April. (It also has regional Montreal Canadiens rights.) TSN also has a strong NFL, tennis and golf presence. Rogers will have the existing property rights for the NHL playoffs as well as regional interests in Vancouver, Calgary, Edmonton and Ottawa. Plus its existing monopoly on the Blue Jays broadcasts.

Bell is reportedly interested in cutting its property inventory and concentrating on “5G, cloud and enterprise solutions”. TSN says it remains the prime media backer of the CFL, even though it no longer has an ownership position. Mediocre Toronto FC remain an add-on with a niche audience. As NHL national rights holder, Sportsnet (using CBC as a cutout) will still be the major outlet for postseason hockey. It’s also the exclusive home of the Blue Jays and the MLB postseason.

What does it mean in business terms? Despite the apparent cordiality of the deal, there is a fly in the ointment should digital companies such as Amazon, Prime, Apple, YouTube or Disney decide to bid on the primo national NHL broadcast rights packages. Already big leagues such as NFL, MLB and NBA have hived off packages to these outfits. Could they drive the price past Rogers’ comfort zone?

All this begs the question of what happens to the Raptors, Argos and Toronto FC which have fallen from their hip status of years prior. It’s well known that Rogers execs aren’t fond of Raptors president/ GM Masai Ujiri. Will they get the love in the C suite to bid on the top basketball contracts? Ditto Toronto FC, a pet project of Tanenbaum’s. It competes nationally with other Canadian teams. Will it have an ally in the front office?

If there is an ally it will have to be the peripatetic new CEO Keith Pelley who returns to Canada from running the European PGA Tour after stints running TSN, Rogers Sportsnet, the 2010 Winter Olympics  and the Toronto Argos. Pelley knows all the broadcast and sports players firsthand from his prior gigs. He’s seen as an innovator but he also has good friends in the traditional sports leagues.

The one certainty is that cable and satellite packages will not decrease in price. Nor will ticket prices as pro sports continues to stretch the boundaries on how much people will pay for tickets (still a key revenue for NHL owners). And, for those wondering, the chances of leading newscasts with a Maple Leafs practice will be remain very strong for the future.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

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