Household income declines in Alberta due to oil, but still among highest in Canada

Household income declines in Alberta due to oil, but still among highest in Canada
CHEK
The Edmonton skyline. Those living in Edmonton and Calgary continue to bring home some of the highest wages in Canada, taking in over $10,000 more than the average Canadian household, according to Statistics Canada. (Photo credit: Nicholas Pescod/CHEK News)

Anca Dan built a successful career working administrative jobs in the oil and gas industry for more than two decades, but in recent years she has shifted her focus toward her own startup company — a lifestyle app for single parents.

After oil prices crashed in 2015 — and then swung up and down amid volatile global demand and shifting environmental regulations — Dan says technology has become a more sustainable industry than oil and gas and a better way to ensure she can leave a legacy for her two sons.

“If you’re not into tech, you’re kind of a dinosaur,” said Dan, a single parent who moved to Canada from Romania in 1984.

“And Calgary is a good place to foster this kind of innovation.”

Data released Wednesday by Statistics Canada suggests the same. It shows Calgary households lead the country in highest after-tax income despite a $5,000 decline since the last census.

The decline, also seen in Edmonton, were a result of the urban centres taking a hit from low oil prices and the COVID-19 pandemic, said a spokesperson for Statistics Canada.

“Oil prices were at record lows (in the spring of 2020) … and that tends to have far-reaching effects on the economies of the province, and not just the resource sector,” said AndrĂ© Bernard, chief of the centre for income and socioeconomic well-being at Statistics Canada.

Despite the decline, those living in Edmonton and Calgary continue to bring home some of the highest wages in Canada, taking in over $10,000 more than the average Canadian household.

In Edmonton, the average household income people made after taxes was $84,000 in 2020, down from $87,000 in 2015. Meanwhile in Calgary, average household income after-tax was $87,000 in 2020 down from $92,000 in 2015. This is higher than Canada’s median after-tax household income of $73,000.

Standing out from their Prairie counterpart, the data showed Saskatchewan and Manitoba both saw a gain in after-tax household income in 2020, but people living in those provinces didn’t pocket as much money as Albertans.

“Alberta is still ranking No. 1 in terms of the after-tax household income … and is still the highest among the provinces,” said Jennifer Yuen, senior analyst with Statistics Canada.

Alberta has historically attracted mostly working-age people and young immigrant families looking for affordable living, said Jenny Godley, associate professor in the department of sociology at the University of Calgary.

She said while places like Alberta’s oil boomtown, Fort McMurray, still offer people lucrative opportunities through natural resources, the economy across the Prairies has become more diversified over recent years.

People are reconsidering how they want to spend the next 20 years of their career, and for some, like Dan, that means leaving the oil and gas industry behind — even as oil prices surge once again — in exchange for more stability.

“Something that’s happening is that a lot of jobs are opening up in other sectors,” Godley said.

“We hear almost every week about a new company setting up that’s in the tech sector, and clean energy as well. There’s a lot of appetite now for branching out from the oil and gas industry.”

Higher wages and diverse industries are what drew 33-year-old Michael Malinowski to Calgary, where he works as a geotechnical engineer, from a small town in southeastern Saskatchewan.

“There’s more of that dog-eat-dog mentality (in Alberta). I feel like here everybody is chasing that extra dollar or two per hour,” Malinowski said.

Like Dan, who wants to leave something for her children, Malinowski said his priority is building for his future. Whether that’s in Calgary or back in Saskatchewan, Malinowski said it will depend on which economy best supports his plan to live affordably.

“In Alberta, taxes are cheaper and income is higher. That’s potential to save more money.”

Anca Dan, shown in this undated handout photo from Calgary, had built a successful career working administrative jobs in the oil and gas industry for more than two decades, but in recent years she has shifted her focus toward her own start-up company — a lifestyle app for single parents. Tired of the ups and downs within the oil and gas industry, Dan says technology can provide more sustainable income, and will help her leave a legacy for her sons. (Anca Dan/The Canadian Press)

This report by The Canadian Press was first published July 13, 2022.

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