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B.C.'s employment income growth underwhelms compared to rest of Canada

DH Vancouver Staff Jan 22, 2015 1:02 pm

If you have noticed your employment income has not increased much since 2006, a recent report shows you are not the only one.

The Broadbent Institute analyzed data from Statistics Canada between 2006 and 2012 to determine how annual employment income has changed Canada-wide and in each province and territory.

Employment income is reported to Statistics Canada each year for tax purposes and is used as a calculation to determine economic well-being. This data is separate from “household income” which includes income from investments, pensions and government, whereas “employment income” comes from paid jobs and income from self-employment.

The Broadbent Institute reports that employment income generally increases over time if there is an increase in pay rates and annual salaries, as well as an increase in working hours. Incomes will also rise if higher paid jobs are created in the economy to replace low-paid jobs.

Since 2006, Canada has seen a boom in higher paid jobs in the resource sector, particularly the agricultural industries and energy sector, whereas manufacturing and service industry jobs are generally lower paying.

Across Canada, median annual employment income rose by 3.5 per cent, meaning a median change of +$1,073, but some areas far out-performed others. Provinces and territories with large resource economies have seen the largest increase in median employment income, according to the Broadbent Institute’s report.

Employment income increased in large oil and agriculture producing regions such as Newfoundland and Labrador (37 per cent), Saskatchewan (25 per cent) and Alberta (12.9 per cent), while median incomes in manufacturing-mecca, Ontario, fell 1.7 per cent and British Columbia, with a lower performing resource economy and the west’s biggest service industry, fell 2.4 per cent.

Provinces with the highest increase in median employment income between 2006 and 2012, compared with British Columbia

Income Chart 2
Image: Vancity Buzz

The data is also sorted by Census Metropolitan Area, and similar to provinces, increases were strongly segregated by resource producing regions and non-resource producing regions.

St. John’s, Newfoundland was the city with the largest income increase at 23.9 per cent, followed by Saskatoon (17.8 per cent), Regina (15.2 per cent), Edmonton (14.2 per cent) and Greater Sudbury (11.7 per cent).

Windsor, Ontario, where a great portion of Canada’s car manufacturing takes place, felt the greatest loss in income at -13.6 per cent.

Median employment income by Census Metropolitan Areas in British Columbia

Income Chart 1
Image: Vancity Buzz

In British Columbia, Abbotsford-Mission’s median income fell by -5.1 per cent followed by Victoria at -4.8 per cent and Vancouver at 3 per cent. Kelowna was the most stable metropolitan area in B.C. with a decrease of only 0.9 per cent.

Census Metropolitan Areas in Canada with the highest median employment incomes in 2012, compared to Vancouver, B.C.

Income Chart 3
Image: Vancity Buzz

Vancouver has the 25th highest median employment income out of 33 Census Metropolitan Areas in Canada. Two of the five worst performing cities were in British Columbia (Victoria and Abbottsford-Mission).

The minimum wage debate may contribute to the percentage increase disparity. Newfoundland and Labrador, with the biggest median income increase, saw its minimum wage increase by 53 per cent between 2006 and 2012. Saskatchewan’s grew by 32 per cent, Alberta’s by 39 per cent and Prince Edward Island’s by 40 per cent.

In contrast, British Columbia, with it’s decrease in median income, only saw a minimum wage increase of 17 per cent from 2006 to 2012; however, Ontario, the second worst performing province, had a minimum wage increase of 32 per cent, comparable to Saskatchewan, one of the best performing.

The 2008 economic recession and the the decline in domestic manufacturing impacted Ontario’s median income decrease. Between 2004 and 2008, Ontario lost one in five manufacturing jobs, totalling 198,600.

With the service sector providing almost four out of five jobs in British Columbia, the smaller increase in minimum wage may have a larger impact here than other provinces. A decrease in our forestry industry, particularly pulp and paper mills, has also impacted the number of high paying jobs in the province.

Jock Finlayson, Executive Vice President and Chief Policy Officer at the Business Council of B.C. told the Vancouver Sun today that several factors explain the lacklustre performance in Ontario and B.C.

The paper reported that Ontario and B.C. fell because neither are major oil producers, both lost jobs in key sectors and both provinces take in more immigrants than other provinces.

This data from Statistics Canada is adjusted to reflect the 11.63 per cent increase in consumer prices to account for purchasing power


Featured Image: BC forest via Shutterstock

DH Vancouver Staff
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