Fraser Forum

Atlantic Canadian incomes significantly lower than New England incomes

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Atlantic Canadian incomes significantly lower than New England incomes

Atlantic Canada and New England share many similarities. In addition to being geographically proximate, both regions have similarly structured economies, shared history and cultural ties. But despite these similarities, there’s a large income gap between the two regions—typical residents of most of New England’s large metropolitan areas enjoy substantially higher employment income than their counterparts in Atlantic Canada.

According to a new study, most cities in New England reported higher median employment incomes than most cities in Atlantic Canada in 2019 (the latest year of comparable data not distorted by the pandemic). Among 20 jurisdictions measured, the five Atlantic Canadian cities occupied five of the bottom six places in the rankings. Median income is an important measure of labour market health because it relates to what people earn in the labour market while stripping out the effects of government transfers and passive income.

Consider a comparison between New Brunswick’s three largest cities of Moncton, Fredericton and Saint John and Maine’s three largest cities of Bangor, Lewiston and Portland.

All six cities have comparable population size and all are nearby to one another geographically. Yet all three cities in Maine have incomes substantially higher than the three New Brunswick cities. The lowest-earning New Brunswick city (Moncton) reported income $14,165 lower than the highest-earning Maine city (Portland). And this gap generally grew over the course of the 2010s.

On a separate measure—median employment income growth—Atlantic Canada’s cities have also trailed their New England counterparts in recent years. From 2010 to 2019, Halifax and Fredericton experienced compounded income growth of just 0.2 per cent per year while those in Saint John and Moncton fared only slightly better at 0.3 per cent annually. This outperforms only three of the 15 New England cities, and is far less than the income growth observed in Lewiston (2.3 per cent), Bangor (1.7 per cent) and Boston (1.3 per cent).

Obviously, an income gap of thousands of dollars per year makes a big difference for living standards and quality of life. As long as growth rates in Atlantic Canada’s cities trail their New England counterparts, this gap will continue to grow and New Englanders will continue to enjoy comparatively higher living standards.

But Atlantic Canadians needn’t accept this fate as permanent, and closing this gap through stronger public policies should be a top priority for governments in cities and provinces in the region.