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.

From the Fraser Institute

By Mackenzie Moir and Bacchus Barua

Unfortunately it’s now very common to see stories about how long provincial wait times for medical care are driving patients to seek care elsewhere, often at great personal cost. Take the recent case of the  Milburns in Manitoba who, after waiting years for a knee surgery, are now considering selling their home and moving to Alberta just to get on a potentially shorter public wait list.

Patients in Manitoba could expect to wait a median of 29 weeks to see an orthopedic specialist after a referral from a family physician, then they still faced a median 24.4 week wait to get treatment. In other words, the total typical wait for orthopedic surgery in the province is more than one year at 53.4 weeks. Remember, that’s a median measure, which means some patients wait much longer.

Unfortunately, the Milburns are unlikely to get more timely care on the public wait list in Alberta. At 64.1 weeks, the total median wait for orthopedic care in Alberta was actually longer than in Manitoba. And this doesn’t include the time it takes for provincial coverage to activate for a new provincial resident, or the time it will take to find a new family doctor and get the necessary tests, scans and referrals.

To get more timely care, the Milburns are left with unenviable options. Because they’re insured by Manitoba’s public health-care plan, paying for covered care out of pocket is restricted. They can, however, pay for and receive care privately in other provinces as uninsured visitors (i.e. not move there permanently). Specifically, certain provinces have “exemptions” that allow physicians to charge out-of-province patients directly to provide these procedures privately.

Alternatively, the Milburns could leave Canada and travel even further from home to receive timely care abroad.

But it doesn’t have to be this way.

Long wait times are not the necessary price Canadians must pay for universal coverage. In fact, Canada is one of 30 high-income countries with universal health care. Other countries such as Switzerland, the Netherlands, Germany and Australia have much shorter wait times. For example, only 62 per cent of Canadians reported access to non-emergency surgery in less than four months in 2020 compared to 99 per cent of Germans, 94 per cent of Swiss and 72 per cent of Australians.

The difference? These countries approach health care in a fundamentally different way than us. One notable difference is their attitude towards the private sector.

In Germany, patients can seek private care while still insured by the public system or can opt out and purchase regulated private coverage. These approaches (universal, privately paid or privately insured) are able to deliver rapid access to care. The Swiss simply mandate that patients purchase private insurance in a regulated-but-competitive marketplace as part of their universal scheme. Lower-income families receive a subsidy so they can participate on a more equal footing in the competitive marketplace to obtain the insurance that best fits their needs.

Perhaps the most direct comparator to Canada is Australia—not just geographically, but because it also primarily relies on a tax-funded universal health-care system. However, unlike Canada, individuals can purchase private insurance to cover (among other things) care received as a private patient in a public or private hospital, or simply pay for their private care directly if they choose. In 2021/22 more than two-thirds (70 per cent) of non-emergency admissions to a hospital involving surgery (both publicly and privately funded) took place in a private facility.

Of course, these faster-access countries share other differences in attitudes to universal health-care policy including requirements to share the cost of care for patients and funding hospitals on the basis of activity (instead of Canada’s outdated bureaucratically-determined budgets). A crucial difference, however, is that patients are not generally prevented from paying privately for health care in their home province (or canton or state) in any of these countries.

Without fundamental reform, and as provincial systems continue to struggle to provide basic non-emergency care, we’ll continue to see more stories like the Milburn’s. Without reform, many Canadians will continue to be forced to make similarly absurd decisions to get the care they need, rather than focusing on treatment and recovery.