Business
Median wages and salaries lower in every Canadian province than in every U.S. state
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:
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.”
From the Montreal Economic Institute
Seven in 10 Canadians are concerned about the negative impact of cancelled energy projects on Canadian jobs.
More than half of Canadiens are against the federal mandate forcing all new cars sold in Canada to be electric by 2035, shows a new MEI-Ipsos survey released this morning.
“Across the country, Canadians are a lot more hesitant to ban conventional vehicles than their elected representatives in Ottawa are,” said Krystle Wittevrongel, director of research at the MEI. “They have legitimate concerns, most notably with the cost of those cars, and federal and provincial politicians should take note.”
The poll shows that 55 per cent of Canadians disagree with Ottawa’s decision to ban the sale of conventional vehicles by 2035. In every region surveyed, a larger number of respondents were against the ban than in favour of it.
Among Canadians who don’t already own an electric vehicle, slightly fewer than one in four said their next car would be electric.
Key reasons cited for this lukewarm attitude included the high cost of the cars (70 per cent), the lack of charging infrastructure (66 per cent), and their reduced performance in Canada’s cold climate (64 per cent).
Across the country, only 26 per cent of Canadians believe Ottawa’s plan to ban the sale of conventional vehicles is realistic. Meanwhile, 66 per cent maintain that the plan is unrealistic.
“Canadians understand that 2035 is sooner than Ottawa thinks, and nothing indicates electric vehicle adoption rates are going to follow what federal lawmakers anticipated,” notes Ms. Wittevrongel. “Concerns with their high cost, the lack of charging infrastructure and their poor performance in our cold climate remain strong.”
The survey also found Canadians were troubled by the effects that federal legislation has had in stalling or cancelling energy projects.
Seven in 10 respondents were concerned by the negative impact on Canadian jobs arising from the cancellation of tens of billions of dollars in energy projects due to regulatory hurdles.
Slightly more than three in four Canadians (76 per cent) say the federal government’s environmental impact assessment project takes too long, with only nine per cent taking the opposite view.
“Canadians understand that our energy industry plays a key role in Canada’s economy, and that lengthy approval delays from regulators have a negative impact on a project’s chances of happening,” explains Ms. Wittevrongel. “They are looking for leadership in Ottawa and in the provinces to cut down on bureaucratic hurdles and shorten the time it takes to get shovels in the ground.”
A sample of 1,190 Canadians 18 years of age and older was polled between September 18th and 22nd, 2024. The results are accurate to within ± 3.3 percentage points, 19 times out of 20.
The results of the MEI-Ipsos poll are available here: https://www.iedm.org/wp-
The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
Federal Greenwash law: guilty until proven innocent
Some dockworkers earn more than $400,000 a year
Cartels, UN, and NGOs Fuel U.S. Border Crisis – A Report from Colombia
‘There Were Bodies In Trees’: Rural South Decimated By Hurricane Helene As Death Toll Rises Above 130
-
Crime9 hours agoCanadian church goes up in flames for the third time in a week
-
Alberta14 hours agoDanielle Smith confirms Alberta will introduce bill to ban men from competing in women’s sports
-
Brownstone Institute2 days agoThe FOIA Lady Pleads the Fifth
-
Alberta1 day agoAlberta rail hub doubling in size to transport plastic from major new carbon-neutral plant
-
Economy1 day agoOttawa’s proposed ‘electricity’ regulations may leave Canadians out in the cold
-
Alberta2 days agoChris Scott and Rebecca Ingram attempting Class Action Lawsuit against Province for COVID restrictions
-
National1 day agoParliament’s Debate on Bill 377: A Battle for Transparency, Accountability, and the Control of National Security
-
Alberta20 hours ago
Class Action Lawsuit Against the Province of Alberta – Rath on Behalf of Ingram and Scott