Farewell, the Alberta advantage. In the post-boom oil province, the wealthy get less
For ages, that was Alberta’s dream: come west or head north to Fort McMurray, and almost anyone could end up with a paycheck. above $100,000 drive a truck or as a carpenter.
The 2015 oil crash took a baseball bat to these fantasies, with heavy job losses from the oil sands to the rigs to the corporate offices in Calgary.
The new census data shows just how big the drop has been at the top end of the wage scale. Between 2015 and 2020, the number of Albertans earning six-figure incomes fell by 75,000.
In other words, in a few years, the province got rid of a sixth of its high incomes. During the same period, Canada as a whole gained one-eighth more 100K club members as economies and populations grew.
Consider the comparative fortunes of Quebec. In 2015, there were 540,790 Albertans with a gross income over $100,000, compared to 437,065 in Quebec, despite that province having twice the population.
Five years later, those numbers have all but reversed, thanks to the collapse of Alberta’s resource sector and strong, more diversified growth. Quebec economy. In 2020, there were 556,780 inhabitants of the beautiful province above that income plateau, compared to 453,550 in its western counterpart, according to census data.
There is a flip side to Alberta’s wage story — undeniably good news in the ongoing fight against poverty and income inequality.
During the same 2015-2020 period, the number of low-income residents, earning less than $25,000 a year, also fell significantly – by 65,000 people, or 9%.
A major factor was likely the 2015 creation of the Canada Child Benefit, which sent regular checks to young families, says Gillian Petit, senior research associate at the University of Calgary’s Schools of Public Policy. The same dynamic contributed to rising low-income rates across the country, although it was only in oil-producing provinces where high-income rates also fell (this happened in Newfoundland). and Labrador as well and in Saskatchewan).
“In Alberta we see this squish towards the middle, whereas in other provinces we see more movement up,” Petit says.
This has made a substantial difference to income inequality in Alberta, which in 2015 had a far greater disparity than any other province. Rising poverty and falling high wages have actually reduced this province’s income inequality score by a hair’s breadth below Ontarioeven though these reduced poverty rates have helped reduce inequality nationwide.
This is also a positive development, as the economic literature links the gaping gaps between rich and poor to the fraying social cohesionsaid Little.
But with that, another gap has narrowed dramatically: that between incomes in Alberta and those elsewhere.
Even though Albertans’ incomes have dropped between censuses, they still earn more than other Canadians: the median after-tax household income was $83,000 in 2020. The second highest province is Ontario with $79,500, and the national median is $73,000.
But go back to five years earlier. The income of the typical Alberta family was $16,500 higher than that of the Ontario family and more than $20,000 higher than that of the typical Canadian family. It was pretty much the same in 2010.
As Alberta declined, revenues from other provinces caught up.
« The Alberta advantage is definitely fading in some ways, » Petit said. « But not in all respects. We still have the lowest poverty rates. »
Up, up and… away?
The most recent census, of course, was a snapshot taken last year that asked for income levels from the previous year. If you’ve read this far in the story, you’re probably pretty aware of what’s been going on lately at Oil pricesand how this pic helped bring back jobs to pre-crash levels of 2015.
Today, the same sector that was losing jobs is in the throes of labor shortages. And in many cases, that means luring people into the Alberta oil patch with higher wages.
But so much has happened in the oil sector that suggests Alberta’s big paychecks won’t rebound in the same way. Around Fort McMurray, the age of lucrative, labor-intensive industry oil sands megaproject still not likely to return. It could also help keep a revival of white-collar oil jobs at bay.
Companies have responded to falling prices by becoming leaner and more efficient, that is, able to produce more oil and gas with fewer workers and at lower cost.
Alberta’s building trades are negotiating wage increases to help keep pace with inflation and make up for recently lost ground. « We’ve taken some setbacks over the past few years, » said Tyler Bedford, spokesman for the trades group. « Every inch you trade, you’re always behind. »
What about those days when Alberta was the nation’s magnet for hard hats and coveralls? Workers are now being drawn elsewhere, with major construction projects in other provinces, from hydroelectric works in Quebec to liquefied natural gas infrastructure in British Columbia.
Perhaps the province’s ongoing efforts to diversify into technology can help, but every part of Canada is struggling to court this high-paying sector. Alberta just isn’t the same big-money promised land anymore.