economy
MAKING HAY WHILE THE SUN SHINES IN RAINY BRITISH COLUMBIA The feel-good story of 2019 was the one about wage growth, which has been robust from east to west and for all the rest (mostly).
The continuedmarriage of constrained labour supply and elevated labour demand across Canada and in BC continues to yield robust wage growth. For Canada, the past year saw the median weekly wage rate for full-time positions rise by 5.0%—or almost 2.5 times the previous five-year average rate of 2.1%. This rate of wage increase nationally reflects an uneven landscape of rising purchasing power across Canada’s provinces and territories. Of note is that Alberta, while experiencing wage growth over the past year, saw an increase of only 2.8% (though this was still higher than the 2.3% annual rate of increase from the previous five years), while Ontario lead the country with an objectively whopping 7.7% increase. So, what of BC? The province itself was no slouch, registering wage growth of 6.8% most recently, which is 183% faster than the
average annual experience of the prior five years. Furthermore, with consumer price inflation remaining in check—for Canada as whole the latest data show an inflation rate just slightly above the midpoint of the Bank of Canada’s target range, coming in at 2.4%—real(i.e.inflation-adjusted)wageshave also been growing. On average in Canada real wages were up 2.6% over the past year, while in BC they were up 4.4%. Combined with low (and once again falling) interest rates, these rising real incomes help to support the economy broadly and housing markets more specifically, making it easier at the margin for those looking to buy to do so, and for those who already rent or own to continue to afford their payments (this, in turn, helps to explain Metro Vancouver’s continued low mortgage arrears rate and rental vacancy rate).
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