Canadians Are Seeing Real Wages Fall As Inflation Outpaces Income

The Canadian economy might seem booming — but not for everyone. Statistics Canada (Stat Can) payroll data shows elevated job vacancies in February. Wages increased, as one would expect with such high job vacancies. They just failed to keep up with the kind of growth expected in a high inflation environment. Average wages grew by less than half the inflation rate, meaning a loss in real earnings. 

Canadian Employees On Payroll Fell, But Increased Seasonally

Stat Can unadjusted employees on payroll made a sharp decline for the month. Unadjusted employees reached 15.9 million in February, down 3.45% (570,100) employees from a month before. It effectively rolls back the numbers to September 2021. 

When adjusted for season, the data looks a lot better. Seasonally adjusted employees reached 17.2 million in February, up 0.8% (142,900) employees. Over 1.3 million jobs are on paper only and considered seasonal demand. Usually seasonal adjustments don’t change much, but this one feels worth mentioning. Especially since wages don’t seem to be reflecting the tight labor market narrative.

Canadian Average Wages Are Falling In Real Terms

Speaking of wage growth, in a tight labor market with high inflation pay should be soaring, right? Not the case, it appears. Employees earned an average of $1,160 in February, up 2.4% from last year. In any other year, that would be a great surge. This year, where CPI came in at 5.7% during the same period, means real wages fell 3.3% — not great. Subsequent inflation data has already been reported, and most likely further outpaced wages.

Canadian Average Weekly Wage

The weekly earnings of an average payroll employee in Canada, including overtime. Expressed in current and January 2020 dollars.

Source: Statistics Canada; Better Dwelling.

Canadian Job Vacancies Remain Elevated

Canada still has a lot of jobs waiting to be filled and few people interested in filling those spots. Job vacancies came in at 826,500 jobs, down 0.5% from a month before. This is down 16.4% (-161,800) from the record high reached in September 2021. Falling vacancies mean labor market pressures are easing, but let’s not get ahead of ourselves. Job vacancies are still over 60% higher than they were at the start of 2020, so this is still very high. It’s just not as high.

Canadian Job Vacancies

The monthly number of unfilled jobs in Canada.

Source: Statistics Canada; Better Dwelling.

February payroll data was mixed as real wages fell with elevated job vacancies. High inflation isn’t translating into higher wages (yet), meaning households are taking home less. It’s long been an issue that wages have failed to keep up with housing in Canada. However, it’s fairly rare to see wages fail to keep up with inflation — especially while this is supposed to be a great economy.



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Chronos 2 years ago

    How many of those job vacancies are due to vaccine mandates? City of Hamilton, City of Toronto have announced more firings of the unvaccinated. Those are the ones I happened to see. How many more? Pfizer BionTech admitted to their investors, in security filings a couple of days ago, that their products are neither safe nor effective and that they may never be able to get authorization beyond emergency use. Ontario statistics by vaccination status per 100K consistently show higher infection and death rates among the vaccinated (highest among triple vaccinated) than unvaccinated. We have elevated vacancies rates across sectors, yet we continue to fire the unvaccinated. Even now, when the vaccine makers admit their products can’t prevent infection, stop the spread and may poser risk to those who take it? What’s wrong with this picture?

  • Alan 2 years ago

    Remember the plan of Trudeau and his rental property owning buddies is to artificially drive down wages using policies that 1)increase demand for real estate, and 2)increase competition for jobs, driving down wages.

    The temp agencies are growing in number, because companies want to cut costs by hiring staffing agencies, but this drives down wages for the Canadian workers. It’s a cycle of poverty.

    I wonder how does the recent international student graduate manage to get by with C$1,800 a month after taxes. They can’t afford to rent a one-bedroom in the GTA with that.

Comments are closed.