Canada’s energy sector: A powerful social equalizer

Oil and gas industry has narrowed the wage gap in resource-rich provinces, says UBC study

For decades, the oil and gas industry has been an engine of Canada’s economy.

And for many Canadians, says the Montreal Economic Institute, it’s also been the great socioeconomic equalizer.

The energy sector has played a large role in narrowing the gap between the rich and poor in provinces blessed by natural resources, the MEI’s Jasmine Guénette and Karl-Javid Lalonde-Dhanji write in a recent commentary published by the Financial Post.

For proof, they point to a 2015 study conducted by the UBC’s Vancouver School of Economics—which found that wage inequality declined between 1999 and 2013 in Alberta and Saskatchewan.

The study estimates that:

The energy sector’s boom during this period accounts for 2/3 of the difference in wage growth between Alberta, Saskatchewan and Newfoundland and the rest of Canada; and
The average wage in Ontario during this period grew by 23% less than it did in Alberta, Saskatchewan and Newfoundland.

“Wages in Newfoundland, Saskatchewan and Alberta grew much faster than in other provinces,” write Nicole Fortin and Thomas Lemieux, the UBC study’s authors, who also found that wages of lower-skilled workers grew more quickly than those with university education.

Referring to recent pipeline expansion projects announced by the federal government, Guénette and Lalonde-Dhanji write: “These are not ‘McJobs’ but, rather, high-paying work. Companies also often provide apprenticeship programs and courses to employees wanting to improve their skill sets, which have a lasting positive impact on these workers’ lives.”

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