Canada: Wage growth heating up - NBF

Canada’s wage growth is decidedly heating up, to the Bank of Canada’s chagrin as April’s Labour Force Survey showed an annual increase of 3.6% for the average hourly wage of employees, the highest since 2012, suggests Krishen Rangasamy, Research Analyst at NBF.

Key Quotes

“So what’s behind the surge in wage inflation? Increases to the minimum wage in Quebec (May 2017), British Columbia (September 2017), Alberta, Saskatchewan and Manitoba (October 2017), all Atlantic provinces (April 2018), and of course Ontario (January 2018) have clearly boosted year-on-year comparisons for the average wage rate. Workers age 15-24, i.e. those more likely to earn the minimum wage, are seeing an annual wage inflation rate of nearly 9%, more than double the average for all employees. But, the uptrending wage inflation is also due to the tilt towards full-time jobs, the latter’s share of total employment rising to a decade-high of 81.6%. All in all, the latest data does nothing to change our view that the tight labour market will continue to fuel inflation pressures this year.”