Canada’s big cities lag behind U.S. cities on middle-income earnings

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Appeared in National Newswatch, December 11, 2023
Canada’s big cities lag behind U.S. cities on middle-income earnings

In the early 1980s, Canada’s per-person gross domestic product (GDP), a common measure of economic prosperity, was almost identical to the United States. Since then, Canada has fallen further and further behind and the gap today stands at approximately 30 per cent.

To shed further light on this prosperity gap, a new study compared median employment income in the 141 largest metropolitan areas in Canada and the U.S. (that is, all metro centres with a population of more than 400,000).

The results were striking. Canada’s large urban areas were entirely absent from the upper echelons of the rankings and were heavily clustered near the bottom.

In fact, of the 14 Canadian metro centres in the study, only two (Edmonton and Ottawa) are in the top half of the overall rankings. And even these cities aren’t near the top of the list (Ottawa ranks 52nd, Edmonton ranks 53rd). In other words, none of Canada’s large urban centres are in the top one-third of the rankings on median employment income.

But Canadian cities dominate the lowest part of the ladder. Out of the bottom 20 metro areas, seven are in Canada including Montreal, Toronto, Vancouver, London and Halifax.

Moreover, we compared Canada’s three largest metro centres—Toronto, Montreal and Vancouver—to the 23 American centres that are at least as populous as Vancouver. In this index of 26 major urban centres, Canada’s three largest cities occupied the bottom three slots on median employment income. The lowest-ranked U.S. city (Orlando) still had median employment income $1,528 higher than Toronto’s.

When we compare Canada’s biggest metropolitan areas to large nearby U.S. regional economic hubs, the results are even more sobering.

For example, Chicago’s median employment income was 35.1 per cent higher than Toronto’s—this represents a gap of $13,185 per year. And the Seattle urban area’s median employment income was $23,756 higher than Vancouver’s.

From coast to coast, U.S. urban areas generally far exceed their Canadian counterparts on an important indicator of labour market health and economic strength. Clearly, the longstanding and well-documented prosperity gap between the two countries is not just a matter of academic concern—it’s directly reflected in the size of paycheques earned by middle-income workers in the two countries.

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