B.C. income growth worst in Canada: analysis

Peter O'Neil / Vancouver Sun

OTTAWA — B.C. experienced the worst income growth — in fact, incomes declined — of any province in Canada during the 2006-12 period, according to an analysis of Statistics Canada data by an Ottawa think-tank.

B.C.’s inflation-adjusted median income fell 2.4 per cent, from $29,917 per tax filer to $29,200, during a period when Canada’s overall employment income grew by 3.5 per cent. Median income is the midway point between the lowest and highest incomes.

Ontario, with a manufacturing sector devastated by the 2008 recession, suffered a 1.7-per-cent decline and was the only other province to suffer negative growth.

The bleak performance was particularly striking in B.C. cities, with Metro Vancouver employment incomes falling three per cent, Victoria’s 4.8 per cent, and Abbotsford’s 5.1 per cent.

Oil-producing provinces, not surprisingly, did far better than the national average. Newfoundland incomes soared just under 38 per cent, while Saskatchewan’s jumped 25 per cent and Alberta 13 per cent.

The data, collected by the left-leaning Broadbent Institute and put into charts to allow regional comparisons, plays into the growing political debate heading into the 2015 election of which party best serves the struggling middle class.

“This (the national rate) is certainly a better performance than some other advanced economies, but basically represents a very, very modest increase,” wrote Andrew Jackson, the institute’s chief economist.

He said in an interview Wednesday the contraction in Ontario and B.C., compared to pumped-up wages elsewhere, points to a flaw in Prime Minister Stephen Harper’s strategy since 2006 on making Canada an oil and gas “superpower.”

“Certainly Ontario and B.C. are doing much less well, and that does suggest a need for a more balanced approach.”

One of B.C.’s top economists said lacklustre income growth and uneven distribution of wealth across Canada and especially B.C. shouldn’t be a surprise, given the depth of the 2008 economic crisis and the higher oil prices during the 2006-12 period.

But Jock Finlayson said the StatsCan data dug up by the Broadbent Institute offers an important new perspective, particularly since it provides regional comparisons and looks at median — the midway point of all incomes — rather than average employment incomes, which are skewed upwards due to a small number of high earners.

“I think it is newsworthy,” said Finlayson, executive vice-president and chief policy officer at the Business Council of B.C.

Finlayson also said the release is timely because policy analysts have struggled to get a handle on incomes due to the government’s controversial switch from the mandatory long-form census to the voluntary National Household Survey in 2011.

The income figures produced by StatsCan exclude earnings from pensions, investments and government social programs.

Finlayson cited several reasons to explain why B.C. and Ontario were weak performers over the six years:

- Neither are major oil producers and therefore missed out on the oil-related boom.

- Both lost many jobs in key sectors, B.C. in forestry and Ontario in manufacturing.

- Both provinces take more immigrants than other provinces, and immigrants — particularly those who arrive during a recession — tend to make less money.

Income data released over several years “suggests our economy isn’t creating enough high-paying jobs, that there are relatively more low-paying jobs over time within the broader labour market, and that policy-makers need to pay more attention to the problem of significant numbers of employed people whose job-related earnings make it hard to support a household,” according to Finlayson.

New Democratic Party leader Thomas Mulcair and Liberal leader Justin Trudeau have cited statistics from the federal government released in 2013-14 indicating mediocre income growth in recent decades.

But the Harper government has seized on a Statistics Canada report last year which, after taking into account rising real estate prices, found that the total wealth of Canada’s middle class has risen sharply — though some academics have questioned that data because it relied on the voluntary National Household Survey.

Employment Minister Jason Kenney has also argued that data pointing to a struggling middle class includes years before the Conservatives took power in 2006.

Jackson acknowledged that commodity prices, business decisions, the state of the U.S. and global economies, and provincial government policies are all major economic factors that federal governments can’t control.

“No federal government can take all or even most of the credit or blame for how our economy is doing,” he wrote.

“But it is fair to at least ask the question of whether or not Canadians are better off since the Harper government took office.”