‘That Alberta Advantage has largely disappeared’: Wages lag behind other provinces in growth, report shows

Centre for Future Work Director, Jim Stanford, discusses his recent report on Alberta wages with Alberta Primetime host Michael Higgins.

This interview has been edited for clarity and length.

Michael Higgins: This province has long laid claim to the term ‘The Alberta Advantage’. To draw from the definition on the government’s website, Alberta is the economic engine of Canada. We lead the country in job creation in high earning positions, and life is more affordable and enjoyable.

How is that advantage being lost where wages are concerned?

Jim Stanford: It was once true, that Alberta was, kind of, the promised land for workers. Low unemployment, high wages and affordable cost of living. None of those things are true anymore, and over the past several years, from the workers point of view, that ‘Alberta Advantage’ has largely disappeared.

For about the last decade, Alberta has had the weakest wage growth of any province in Canada, and that trend continued in 2024. Wages have fallen well behind inflation. So the purchasing power of an hour’s work, if you like, has declined by about 10 per cent over that period. You’ve lost about one tenth of your standard of living, based on the real value of wages.

Unemployment has actually been above the national average for several years consecutively, and that’s true today, but the cost of living is not cheap. The idea that if you pay people less, the cost of living will make up for it, has not happened.

In fact, last year, Alberta had the highest inflation of any province, despite those weak wages. So for workers, it’s hard to see the advantage anymore.

MH: Outside of that point about inflation, how do wages in our province compare to other jurisdictions?

JS: Last year Alberta’s inflation was 2.9 per cent on average for the whole year, and hourly wages only grew about 2.2 per cent. So the purchasing power of the hours worked declined, and that was for the fourth year in a row.

Elsewhere in Canada, real wages are growing. That means wages are growing faster than inflation, in part because wage growth is higher, 3.8 per cent across Canada as a whole, but inflation was lower in other provinces.

Alberta, for a long time, was the wage leader in Canada. The highest hourly wages in Canada. They lost that title in 2023 to British Columbia, where wages have been growing faster, they passed Alberta.

Surprisingly, in 2024, Quebec passed Alberta. So the average hourly wage for hourly employees in Quebec in 2024 was a bit higher than in Alberta, and that I’m sure for many Albertans, is both surprising and disappointing.

So Alberta’s leadership role in the labour market has definitely disappeared, and there’s concrete reasons for that.

MH: How is it that wages and salaries are being suppressed? I ask that because wage suppression is terminology you use in the report.

JS: I think there’s several policy levers that the provincial government has been using for some years to try and keep wages down, I think in the interest of boosting profit margins for companies, and a very important one has been the minimum wage.

Incredibly, the minimum wage in Alberta has not been increased once in the last six and a half years, since October 2018. Now just think about how much inflation has occurred in six and a half years, a lot. That means the purchasing power of wages for people in retail, or hospitality, or other industries where the minimum wage is quite common, has just been hammered.

Another factor is the industrial relations or collective bargaining environment in Alberta. It has the lowest union representation of any province by far, and that reflects some of the tighter restrictions and hurdles that prevent workers in Alberta from forming unions.

A final factor that’s been important has been the Alberta government’s very strict approach to wage gains for public servants in the broader public sector. Schools, hospitals, public administration, they had terrible wage increases in the last round of bargaining, 3.75 per cent for most of them over four years, not even one per cent a year, just as inflation was taking off. That’s another thing that has deliberately pulled down average wages in the province.

MH: All of that said, Alberta still remains a huge draw. It’s outpacing the rest of Canada where growth is concerned. Interprovincial migration is a major part of that. Why would people still be coming here if wages are falling behind other provinces?

JS: I think that’s an open question. I know the government has bought ads in other provinces saying, ‘Come to Alberta for the opportunity’, but again, the unemployment rate is higher in Alberta than in Canada as an average, the wage growth has been very poor, the population however, is still growing, partly from interprovincial migration and mostly from international migration.

So I guess people are still hoping that maybe with the next oil boom, or something like that, things will get better. How long that inward migration will continue, I think is an open question, given that the hard reality of it is wage growth is weaker than elsewhere, and the cost of living is higher than most other parts of Canada.

MH: Where government policy is concerned, what do you feel needs to happen to get wages and salaries back on track in this province and return the Alberta Advantage?

JS: I think that first and foremost, the government just has to say, ‘You know what? Wage growth is a good thing. It’s how most people pay the bills and support their families. It’s not something that should be seen as a cost or a danger to be suppressed. We should be encouraging wage growth.’

The ways to do that are obvious. First of all, we need a big increase in the minimum wage to make up for that lost inflation over the last six years. I think we need fairer rules in Alberta around union formation and collective bargaining and strikes or work stoppages when they happen. And then I think the provincial government, where they have control over public sector wages for nurses, teachers, and other public servants, have to come to a fair settlement.

We’re seeing some strikes in school boards right now, people are really angry after what’s happened over the last few years, and I think a better settlement for those workers would go a long way to turning the corner on wages.