The Average Atlantic Canadian Makes $5,000 Less Than People In The Rest Of The Country
HALIFAX – A new study says each person in an Atlantic Canadian household makes, on average, nearly $5,000 less than people in the rest of Canada. The region is also lagging behind when it comes to employment and productivity, but it can catch up.
“Atlantic Canadians should be as prosperous as Canadians elsewhere in the country, and catching up to the rest of Canada economically should be a top priority for policymakers in the region,” said Ben Eisen, a senior fellow with the Fraser Institute and co-author of the study, in a release.
According to the report, Catching Up with Canada: A Prosperity Agenda for Atlantic Canada, New Brunswick, Nova Scotia, P.E.I. and Newfoundland and Labrador could close the gap by “pursuing pro-growth policy reforms.” But the region would need to achieve an inflation-adjusted economic growth rate of 1.6 percent – that’s 0.9 percentage points above the forecasted growth for the rest of Canada – to catch up with the rest of the country within 20 years.
Atlantic Canada, the report says, is behind on three key economic indicators:
- In 2017, the average household income per capita was $4,564 lower than the rest of the country. Each person in an Atlantic Canadian household made an average of $44,237, compared to $48,801 for the rest of Canada;
- Real GDP per capita was $9,773 lower than the rest of Canada that same year. It was $49,469 for the region and $59,243 for the country; and
- In 2018, the employment rate in Atlantic Canada was 55.7 percent compared to 62 percent for the rest of Canada. At the same time, the unemployment rate in the region was higher at 9.2 percent, compared to 5.6 percent for the rest of the country.
But there’s hope if the region introduces pro-growth policies like tax and regulatory reform, reduced government spending, balanced budgets and less debt, the study says.
Looking outside Canada for examples, the Fraser Institute gave two – Ireland and Michigan.
The authors note that after implementing a series of pro-growth policy reforms in the mid-1990s, Ireland was able to reach 5.5 percent average annual economic growth per person until the late-2000s. Michigan also enacted pro-growth reforms after the recession in 2009, helping it generate 1.9 percent annual real economic growth between 2011 and 2017.
“Policies matter, and by pursuing a pro-growth policy agenda, which has proven successful elsewhere, Atlantic Canadians could enjoy the same prosperity and economic opportunities that exist in the rest of the country,” Eisen added.