HILL, OLIVER: Alberta only province or state to experience decline in median employment income

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The Alberta Advantage isn’t what it used to be — and a comparison with U.S. states reveals just how much ground the province has lost on key measures of economic performance. For Albertans, this decline has real consequences, including weaker income growth and fewer economic opportunities. Put simply, it’s time to restore the province’s competitive edge and create the conditions for prosperity.

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Consider this. According to a new study, Alberta was the only province or U.S. state to experience a decline in median employment income — median meaning half of workers earn more, half earn less — between 2010 and 2024 (the latest year of available data), falling by $1,219 (-3.0%), from $40,564 to $39,345 (all dollar figures are inflation-adjusted Canadian dollars).

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Contrast between countries

The contrast with resource-rich U.S. states is stark.

In 2024, median earnings were substantially higher in North Dakota ($52,366), Alaska ($48,721) and Texas ($45,487). In other words, a typical worker in North Dakota earned $13,021 more than a typical worker in Alberta.

Moreover, in 2024 Alberta’s per-person GDP, a broad measure of living standards, was $74,907, considerably lower than North Dakota ($96,825), Alaska ($92,084) and Texas ($86,009). Despite remaining the highest among Canadian provinces, Alberta fell from ranking seventh highest among all 60 provinces and U.S. states in 1999 to 25th in 2024.

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Why has Alberta fallen so far behind?

There are many factors at play, but lagging productivity growth and declining business investment help explain the gap.

Productivity — essentially, how much workers produce in the economy per hour — is a key driver of income growth. Yet from 2007 (the earliest year of comparable data) to 2024, productivity in Alberta grew by just 15.6% compared with 60.6% in North Dakota. Across all 50 U.S. states, the median productivity growth rate was 28.4% — almost double Alberta’s rate. Alberta’s business investment performance has been equally troubling. In 2014, business investment in Alberta was $56,401 per worker — more than double the U.S. ($23,263). Over the next decade, however, business investment per worker in Alberta fell by 51.6% but increased by 31.3% in the U.S. (all numbers adjusted for inflation).

Business investment drives productivity. When businesses invest in machinery, equipment and new technologies, workers can produce more goods and services more efficiently. As firms become more productive and profitable, they can pay their workers higher wages.

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Policy reform

Clearly, reversing these trends will require meaningful policy reform. The Smith government should rein in spending, balance the budget and reduce personal income tax rates to restore Alberta’s tax advantage, while the Carney government should cut costly and complex red tape that stifles oil and gas investment. These changes would help reduce the risk of future tax hikes, attract and retain skilled workers, and encourage business investment.

After all, Alberta’s competition isn’t limited to other Canadian provinces — U.S. states also compete for businesses, investment and skilled workers. With many of these states offering greater economic opportunities, Alberta can no longer rely on its historical advantages to stay competitive. To help improve incomes and living standards for Albertans, policymakers must strengthen the province’s investment climate and create more opportunities for economic growth.

Tegan Hill is director of Alberta policy and Taylor Oliver is an analyst at the Fraser Institute.

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