Ottawa-Gatineau already had the highest median income of any Canadian metropolitan area before the pandemic, and the city widened its lead as COVID-19 restrictions clawed back earnings elsewhere, a new study suggests.
The Fraser Institute published a study Tuesday that compared 2019 employment income in 41 census metropolitan areas, representing Canada’s large cities together with their surrounding suburbs.
It put Ottawa-Gatineau at the top of the list, with $45,500 in annual median income. That means half of those in the area made more than that figure, while the rest earned less.
Capital cities generally fared well in the rankings, said Ben Eisen, a senior fellow at the Fraser institute and one of the study’s authors.
In addition to the national capital metro area, four of the top 10 were provincial capitals. That suggests the local public sector workforce is the reason for its strong showing, Eisen said.
“Those are generally highly compensated jobs,” he said. “I think we can safely say that that’s playing a significant role in having Ottawa at the very top of the list, even higher than some of the regions of the country that we typically thought of as very high-income energy jurisdictions in Alberta.”
Gap could grow
Ottawa-Gatineau barely edged out Edmonton, where the median earner made $30 less in employment income in 2019. But the most recent figures from Statistics Canada suggest it’s pulling further ahead.
In 2020, the median Ottawa-Gatineau earner brought in $47,490 through work.
Edmonton’s median earner lost income compared to 2019, as did those in the next runners-up, Calgary and Regina. Eisen expects further data will confirm the trend.
“I wouldn’t be surprised to see the gap widen further,” he said.
Armine Yalnizyan, an Ottawa-based economist and the Atkinson Foundation’s fellow on the future of workers, criticized the Fraser Institute report for, in her view, choosing data to insinuate that government workers are overpaid.
Highly skilled workers like lawyers, statisticians, geographers and doctors all tend to cluster in public sector jobs largely based in capital cities, she said.
“They have more technical skills than the average worker,” she said. “And they also tend to get paid more than their private-sector equivalents because they are being asked to handle more responsibilities.
“If you think they’re getting paid too much, then watch what you wish for.”
When asked what Ottawa-Gatineau residents should take from his report, Eisen said they should be aware of the important role the government sector seems to have in driving the local economies of provincial and national capitals.
“We make no claim in our paper about anybody making too much money or too little. Every claim in the report is factual,” Eisen said.
“I think for anybody to attribute normative claims to us that we don’t actually make anywhere in the paper isn’t fair or productive.”
Skeptical of report’s use
Yalnizyan remains skeptical that city-based income rankings are especially useful, cautioning that — even in Ottawa-Gatineau — at least half the population would struggle to ever make a downpayment in the city’s housing market.
Like Eisen, she’s not surprised to see the city build its lead during the pandemic, but she expects the gap will tighten as even more recent data trickles in.
“If we were able to magically wave a wand and see how incomes are changing today, you can expect the differential between capital cities and the rest of the economy to be shrinking post-pandemic as the economy picks up speed again,” Yalnizyan said.