New data from Statistics Canada shows that between April and June this year, wages in the Atlantic provinces grew almost twice as fast as the national average, on the back of wage increases in key sectors across the region.
But despite the growth, some experts say the purchasing power of wages is still falling due to inflation.
“Wages haven’t kept pace with inflation, so real wages have tended to fall,” said economist Lars Osberg of Dalhousie University.
In its latest report on GDP, income and expenditure for the period from April to June this year, the federal agency detailed an increase in compensation across Canada, driven primarily by wages in mining, oil and gas exploration, and professional and personal services will be carried .
Nova Scotia had the third-highest wage growth among provinces and territories at 3.9 percent, behind New Brunswick at 4.1 percent and Newfoundland and Labrador at four percent.
Some sectors in NS are seeing wage increases
The professional and personal services industry has been instrumental in raising wages throughout the Atlantic region and in Nova Scotia in particular. Wage increases were also seen in health and social services, finance, real estate and corporate management.
Jobs in the professional, scientific and technical services include those in legal advice, architecture and engineering, computer systems, scientific research, advertising and public relations, said Maryse Carrière, spokeswoman for Statistics Canada.
However, inflation has risen much faster than wages in the province. Data from Statistics Canada shows that the consumer price index – which measures how much the average Canadian household spends on a fixed selection of goods and services – rose about 8.7 percent in Nova Scotia from July 2021 to July 2022.
The difference between inflation and wage growth, according to Osberg, is the fall in the real value of wages, which in Nova Scotia’s case would be about 4.8 percent.
Buy power slides
Casey Warman, an economics professor at Dalhousie, echoed the sentiment, saying Nova Scotians are in a worse position financially than they were before the pandemic, largely due to rising inflation.
“Inflation is seven, eight percent, so that’s a big problem. If inflation is 2 percent a year, it will take 35 years for prices to double. If inflation is about 7 percent a year, it will take 10 years for prices to double.” Warman said, although he added that inflation is unlikely to stay at that level for the next 10 years.
“If [Nova Scotians] If wages don’t keep up, they will lose purchasing power,” Warman added. “If we can’t bring inflation down fast enough, suddenly everyone starts demanding higher wages and it becomes even harder to fight them.”
Osberg said the inflation is affecting all of North America and some parts of Europe. The Canadian and Nova Scotia markets in particular are also dealing with “pressures on the housing stock from population growth, increases in rents, rents and the decline in vacancies,” he said.
Some good news
It’s not all bad news, however. Both Osberg and Warman said job counts at the state and provincial levels have recovered to pre-pandemic levels.
“The job market has definitely recovered from COVID-19,” Warman said. “If we look at the average between 2015 and 2019, we’re right at that level for the employment rate and even below that for unemployment,” he added in Canada.