Wake-Up Call: Canadian Standard of Living Slipping by PJ Wade
 According to a recent Industry Canada study, "A Regional Perspective on the Canada-U.S. Standard of Living comparison," standards of living in Canadian provinces are well behind those of U.S. states, based on data collected from 1992 to 1997. For Canadians who have patted themselves on the back for a perceived higher-than-average standard of living than in the U.S., these findings come as a shock. In fact, only seven states, recorded standards of living below the Canadian average. In one third of U.S. states, the standard of living is more than 25 % higher than the Canadian average, according to the report, and it is more than 50 % higher in Delaware, Alaska, Connecticut and Wyoming. In Canada, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland all rank below Mississippi, the state with the lowest standard of living. Although employment levels have reached all-time highs in many Canadian communities, cooling economies, rising health care costs and skill shortages may cause standards to drop further. Standard of living and quality of housing are so closely linked, Canadians may find their home life under further attack in the coming decades. The best Canadian performer, Alberta, ranked 18th among the combined 50 states and 10 provinces, while Ontario – long describing itself as an economic leader – is in 37th place. British Columbia ranked 49th and the rest of the Canadian provinces were grouped at the bottom of the list. The framework of analysis used by Industry Canada states that "the standard of living is best measured through real GDP per capita as it encompasses all earnings accruing to residents of a country." This means real income per capita is determined by the productivity of workers as well as the proportion of the population at work. A high level of productivity and a large proportion of the population at work will result in a high standard of living. Industry Canada researchers concluded that productivity was the predominant factor explaining income gaps among provinces and states. Differences in employment rates seemed to play a limited role in explaining the gaps and, therefore did not influence final rankings. Productivity ranking of the provinces and states followed a pattern that paralleled standard of living findings: except for Alberta and Ontario, the remaining provinces were listed as the lowest in productivity. |
