In September 2017, Statistics Canada released household income data from the 2016 Census. The median total income of Canadian households rose from $63,457 in 2005 to $70,336 in 2015, a 10.8% increase – it was a decade of significant income growth and economic change in Canada.
But growth was not equally distributed across the country.
Energy Analyst Mark Milke says it’s time for Canadians to remind themselves why the boost in income didn’t reach all Canadian households equally.
In this recent contributed article to the Financial Post, Milke argues the answer is simple, and it’s exposed for all Canadians to see in the data: “[It’s] In resource exploration and extraction.”
According to StatsCan, “Over the decade, the Prairie provinces had the highest growth in both the number of households and household median income in Canada” which they attribute high resource prices that attracted investment and people into Alberta and Saskatchewan. Newfoundland and Labrador also benefited from investment dollars chasing high resource prices.
The boom in resource exploration and extraction also led to boosts in construction and broader economic spending throughout the provinces that attracted resource sector investment.
Milke says government policies play a role in household income growth:
“High resource prices — be they for oil, gas, lumber or minerals — help, but only if a province or region allows its resources to be explored, extracted and then shipped to market.
“The Maritimes mostly sat out the boom in resource prices because, for example, Nova Scotia and New Brunswick banned onshore exploration and extraction of natural gas.”
StatsCan says "The Atlantic provinces and Quebec had the lowest median incomes in Canada in both 2005 and 2015. New Brunswick’s median income in 2015 was the lowest across all Canadian provinces. However, investments in the resource sector during this time led to higher incomes in Newfoundland and Labrador (+28.9%), resulting in the third-fastest income growth among the provinces and territories. This increase lifted Newfoundland and Labrador from the lowest median income in the Atlantic/Quebec region to the highest over the course of 10 years."
The two provinces with the largest populations, Quebec and Ontario, had the slowest median income growth, partly due to the decline in the manufacturing industry which saw labour force reductions of 22 percent over the decade 2005-2015.
The resource boom also lowered the low-income rate – or in non-economic analysis language, lifted people out of poverty. StatsCan data shows “the largest declines in low income occurred in metropolitan areas in resource-rich areas of the country.”
Milke says the lessons learned from the census data should be obvious for all Canadians:
“To belittle or even attack Canada’s comparative advantage in resources is to neglect the positive effect this sector has on Canadian living standards. Snubbing opportunities in developing natural resources comes at the expense of additional jobs and better incomes for the poor and the middle class.”
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