Adieu, Alberta advantage. In post-boom oil province, the rich get fewer

For ages, it was the Alberta dream: come west, or head north to Fort McMurray, and almost anybody could wind up pulling in a salary above $100,000 driving a truck or as a carpenter. 

The oil price crash of 2015 took a baseball bat to those fantasies, with heavy job losses from the oilsands to the rigs to the Calgary head offices.

New census data lays bare just how significant the decline was on the high end of the salary scale. Between 2015 and 2020, the number of Albertans making six-figure incomes dropped by 75,000 people.

To put it another way, in a short few years the province shed one-sixth of its high-end earners. Over the same span, Canada as a whole gained one-eighth more members of the 100K club, as economies and populations grew.

Consider the comparative fortunes of Quebec. In 2015, there were 540,790 Albertans with gross incomes above $100,000, compared to 437,065 in Quebec, despite that province having double the population.

Five years later, those numbers virtually flipped, thanks to Alberta's resource sector crash and a robust and more diverse Quebec economy. By 2020, there were 556,780 residents of la belle province above that income plateau, compared to 453,550 in its western counterpart, according to census data.

There's a flip side to this in Alberta's wage story — some undeniable good news in the ongoing fight against poverty and income inequality.

Over the same 2015-2020 period, the number of lowest-income residents, earning less than $25,000 a year, also shrank substantially — by 65,000 people, or nine per cent. 

A major factor was likely the creation in 2015 of the Canadian Child Benefit, which sent regular cheques to young families, says Gillian Petit, a senior research associate at University of Calgary's public policy schools. The same dynamic helped lift low-income rates across the country, though it's only in the oil-producing provinces where the high-income rates also dipped (It happened in Newfoundland and Labrador too, and in Saskatchewan).

"In Alberta we see this squish to the middle, whereas in other provinces we see more movement up," Petit says.

This has made a substantial difference to income inequality in Alberta, which in 2015 had much greater disparity than any other province. The lifting of those at poverty levels and the dwindling of high salaries actually knocked down this province's income inequality score to just a hair below Ontario's, even though those reduced poverty rates helped curb inequality nationwide.

This is also a positive development, as the economic literature ties yawning gaps between the rich and poor to frayed social cohesion, Petit says.

But with this, another gap has shrunk in a striking way: the one between Alberta earnings and those elsewhere.

Even though Albertans' incomes fell between censuses, they still make more money than other Canadians: the median household's after-tax income was $83,000 in 2020. The next-highest province is Ontario with $79,500, and the national median is $73,000.

But pull back to five years earlier. The typical Alberta family's income was $16,500 greater than its parallel in Ontario, and more than $20,000 higher than the typical Canadian family. It was roughly the same in 2010.

As Alberta sagged, incomes in other provinces have caught up.

"The Alberta advantage is definitely disappearing in some respects," Petit says. "But not in all respects. We still have the lowest poverty rates."

Up, up, and... away?

The newest census, of course, was a snapshot taken last year that asks about the prior year's income levels. If you've read this far into the story, you're likely aware enough about what's happened lately to oil prices, and how that spike has helped bring jobs back to the pre-crash 2015 levels.

Now, the same sector that was shedding jobs is racked by labour shortages. And in many cases, that means wooing people back to Alberta's oilpatch with higher wages.

But so much has happened in the oil sector that suggests Alberta's fat paycheques won't bounce back in the same way. Around Fort McMurray, the age of the lucrative, labour-intensive oilsands megaproject still isn't likely to come back. That could also help keep a white-collar oil job renaissance at bay.

Companies coped with lower prices by becoming leaner and more efficient — that is, able to produce more oil and gas with fewer workers, and at lower costs.

The Building Trades of Alberta is negotiating for worker pay increases, to help keep pace with inflation and make up the recent lost ground. "We've been taking rollbacks for the past few years," says Tyler Bedford, spokesman for the trades group. "Every inch that you bargain up, you're still behind."

And those days when Alberta was the nation's job magnet for the hard-hat-and-coveralls set? Workers are now drawn elsewhere, with major construction projects in other provinces, from hydroelectricity works in Quebec to liquefied natural gas infrastructure in British Columbia.

Maybe the province's ongoing push to diversify into tech may help, but every part of Canada is striving to woo that high-paying sector. Alberta just isn't the same big-money promised land anymore.