The 'Alberta Advantage' has disappeared with the shocking decline in wage growth, says a new report.
The Alberta Wage Disadvantage: Evidence on Alberta’s Continuing Suppression of Wages and Salaries, released by the Alberta Federation of Labour (AFL), and economist and director Jim Stanford of the Centre for Future Work, shows average wages in Alberta fell behind Quebec in 2024 after falling behind BC in 2023.
Alberta wages were 17 per cent higher than the Canadian average in 2013 but are now only 1.7 per cent higher in 2024, which is more than offset by Alberta's higher cost of living.
“Once a promising place for workers to find jobs, earn decent wages, and support their families, Alberta has more recently demonstrated among the weakest labour markets in Canada,” the report said.
“Unemployment is relatively high, wage growth has been far below other provinces, and yet the cost of living is among the highest in Canada.”
According to the report, when wages in most of Canada were finally recovering last year from the effects of post-pandemic disruption and inflation, average hourly wages continued to lag behind inflation in Alberta which had the highest inflation of any province.
In 2024, Alberta's inflation was 2.9 per cent, while the average hourly wage grew 2.2 per cent.
A decline in real wages (wages adjusted for inflation) has been experienced in almost every sector, even the highly profitable petroleum and mining sector.
The report said since 2019, when the United Conservative Party came to power, real hourly wages in Alberta have fallen by a cumulative total of 4.5 per cent, by far the worst of any province.
While there have been economic challenges and disruptions beyond anyone's control, much of Alberta's wage disadvantage is self-inflicted due to deliberate policies to suppress wages, and shift income to corporations and investors, away from workers.
"No single policy reveals that anti-wage bias than Alberta’s shameful freeze in the provincial minimum wage: now tied for lowest in Canada, having been frozen through six years of rapid inflation. The resulting 17 per cent decline in real earnings for the lowest-paid workers in the province is economically destructive and morally bankrupt," the report said.
AFL president Gil McGowan said other UCP wage suppression policies include making it easier for employers to avoid paying overtime, making it harder for workers to join unions and bargain collective agreements, and secret government bargaining mandates to keep wage increases for public sector workers well-below inflation.
"No Albertan ever voted for wage suppression policies, but that's exactly what the UCP has given us," McGowan said.
"It's clearly not in the best interests of the vast majority of Albertans, and I would argue it's not in the best interests of the Alberta economy. A province where wages are falling is also a province where consumers have less to spend. That hurts individuals and families, but it also hurts the broader economy.
"Alarm bells should be ringing."
He said prosperity isn't being shared in the broad way it used to be in Alberta. Times are tough for working people with rising costs for groceries, gasoline, utilities, insurance, and housing. Meanwhile, big companies and corporations are making record profits.
Dustin Quirk, an instructor at the Donald School of Business, Science and Computing at Red Deer Polytechnic, said despite the high cost of living in Alberta, the province still retains some of the 'Alberta Advantage.'
"While rising prices have affected everyone in recent years, Alberta still benefits from lower taxes and relatively more affordable housing than British Columbia and Ontario. Buying a home, covering daily expenses, and paying taxes remain more manageable in Red Deer than in Vancouver or Toronto," Quirk said.
He said the report's findings are not surprising given the UCP has won the last two elections on a platform of reducing the province’s per-capita spending, which has been the highest among all provinces.
"A promised income tax cut, while meeting balanced budget targets, means that provincial expenses are under pressure to be reduced, and salaries comprise a significant portion of government spending. As a result, Alberta’s public sector workers are bearing the brunt of these austerity measures, and the province is losing ground on wage competitiveness."
"On the private sector side, productivity remains a challenge. For sustainable non-inflationary salary growth, Alberta businesses must improve productivity; however, with the province’s economy heavily tied to resource-based industries, achieving such gains is more difficult. Extractive industries cannot leverage productivity growth in the same way as manufacturing or the technology sector," Quirk said.
Jobs, Economy and Trade Minister Matt Jones disagreed with the report's findings.
“The Alberta Advantage remains strong, with our economy showing consistent resilience and growth in the face of external challenges. In December 2024, the province added 39,400 full-time jobs, leading Canada in job creation. Over the past year, nearly 100,000 jobs were added, providing good-paying opportunities for families. Workers in Alberta are also earning more than ever, with average weekly earnings reaching $1,352.45 in October 2024. This was the highest in Canada and a 4.6 per cent increase from the previous year," said Jones, in a statement.
"We are seeing record investment in Alberta. In the first nine months of 2024, Alberta saw $478 million in venture capital across 61 deals. Alberta’s tech firms raised $707 million in 2023, defying the national decline in venture capital. Major projects, like Linde’s $2-billion clean hydrogen facility, demonstrates confidence in the province’s economy."
