Goodbye, Alberta advantage. Half of the province says they are struggling to keep up with daily expenses amid cost-of-living crisis.
According to a recent Statistics Canada survey, 51 per cent of Albertans say rising costs are greatly affecting their ability to meet day-to-day expenses, more than in any other province and six points higher than the national average.
Alicia Planincic, an economist with the Business Council of Alberta, said if you break the inflation data down, there isn’t a huge difference province-to-province on food and bigger budget items. But when it comes to housing, costs in Alberta have soared.
“The thing that is unique to Alberta is really the housing costs. And if you drill down a little bit further, it's really rent in particular,” Planincic said.
The average rent in Alberta has grown 15 per cent in the last year to $1,810, according to the August rent report by rentals.ca and Urbanation.
“I do think that very clearly where Albertans are feeling this inflation challenge the most is in housing,” she said.
Planincic said Alberta also has higher debt loads and a higher unemployment rate than many other provinces, which could be contributing to the people’s financial anxieties.
While costs are rising, average wages in the province have fallen, putting additional affordability strains on Albertans, says Bradley Lafortune, executive director of Public Interest Alberta.
“The real thing that I think we're seeing, and we will continue to see, is the erasing of the so-called Alberta advantage when it comes to wages and earnings of Albertans compared to the rest of Canada. Whether it's hourly wages or average weekly earnings, we've just seen that Alberta advantage completely evaporate over the last several years,” Lafortune said.
Ten years ago, wages in Alberta were 17 per cent higher than the Canadian average, but real wages in the province have since fallen by 10 per cent, according to a study from economist Jim Stanford released in the spring. The province’s nominal minimum wage has been frozen at $15 an hour since 2018, while the average minimum wage across Canada has grown by 27 per cent during the same time.
“Combined with inflation that is still quite high in Alberta, Albertans are really, really feeling the pinch, at least relative to what they were able to absorb previously in times of high inflation,” Lafortune said.
Along with the hot housing market, Lafortune noted Albertans also tend to pay more for insurance and utilities than elsewhere in the country.
“We have a relatively deregulated market compared to other big provinces like Ontario and British Columbia. So when you're looking at car insurance and you're looking at utilities, the cost of keeping the lights on and keeping the heat on, they are a lot higher. And those are not products that most people can go without spending money on,” he said.
The StatCan report found that the number of Canadians reporting rising prices were greatly affecting their ability to meet day-to-day expenses had increased by 12 per cent over the last two years, and that rising prices were disproportionately affecting low-income people.
