Canadian workers far behind US in salary growth: Report

Canada's largest city ranks 102 out of the 114 cities analyzed in study

Canadian workers far behind US in salary growth: Report

Canadian workers are not keeping up with their U.S. counterparts when it comes to salaries, according to a report from the Fraser Institute.

Assessing compound annual growth in employment income among the 141 largest metropolitan areas in Canada and the United States from 2010 to 2019, only three Canadian cities rank in the top half.

“Median employment incomes in Canada’s largest cities are growing more slowly than in comparable US cities, which means Canadians are foregoing higher living standards compared to their US counterparts,” said Ben Eisen, Fraser Institute senior fellow and co-author of Analysis of Changes in Median Employment Income in Large Canadian and American Metropolitan Areas, 2010-2019.

The top cities for Canada are:

  • 51: St. Catharines - Niagara, Ont. (1.0%)
  • 52: Quebec City (1.0%)
  • 57: Vancouver (0.9%)

Toronto – Canada’s largest city – ranks 102 with a compounded salary increase of about 0.4%.

The Toronto CMA alone represents 23.6% of the population residing in all CMAs. By comparison, the largest MSA in America, the New York area, represents just 6.8% of the US population living in large urban areas, note the researchers.

“Given the heavy concentration of Canada’s population in its largest metropolitan area, strong growth in Toronto is crucial to the country’s overall prosperity. These data show that Toronto is near the bottom of the list of the largest MAs in Canada and the United States,” read part of the report.

Meanwhile, Ottawa - Gatineau, Ont. (reduction of just over 0%), Edmonton (reduction of 0.1%) and Calgary (reduction of about 0.3%) saw their income reduced during the span of the last decade.

Two in five (40%) Canadians cite money as a leading source of stress in this year, according to a previous report from FP Canada. In fact, 19.5 million Canadians are currently facing financial vulnerability, and half of Canadians are overwhelmed by debt, according to separate studies.

‘Prosperity gap’ widens

Charleston in South Carolina topped the list with a compounded income growth of 23.7% from 2010 to 2019.

“The central result of this finding is that Canadian CMAs have generally experienced a lower rate of growth in median employment income than US MSAs during this period. Previous research has suggested a ‘prosperity gap’ in favour of US MSAs for the current level employment income. The data in this paper suggest that this gap is generally growing instead of shrinking,” read part of the report.

Canadian companies plan to give a 3.7% total salary increase and 3.3% merit increase in 2024, found a previous Mercer study. Both numbers are lower than the 4.1% and 3,6%, respectively, actual increases that workers got this year.

Meanwhile, California Governor Gavin Newsom recently signed legislation that would push California’s health care workers’ minimum wage to $25 per hour.

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