“Moreover, resource-derived tax dollars fill up government coffers to support strong compensation in middle-class public sector jobs in nursing, education and transit. And what’s more, these benefits don’t only help provinces with plentiful resources, since our equalization formula uses the federal purse to top up provinces without comparable resource-revenue streams.”
Kevin Milligan is professor of economics, UBC Vancouver School of Economics. Disclosure: the author has occasionally advised the federal government on tax policy and economic matters.
Opinions on pipelines are flowing around Canada more quickly than the oil. The ultimate decisions on natural resource projects, however, ought to derive from facts.
As an economist studying income inequality over the last 15 years, I can offer a key fact to the debate. In my view, nothing has contributed more than natural resources to buttressing the Canadian middle class against the rapidly changing global economy of the 21st century.
The importance of resources to middle-class incomes is most clearly seen by looking at a simple measure: the earnings of the middle worker in the economy (the median). Between 2000 and 2015, Canadian median earnings rose by just 6 per cent after inflation, or less than half a per cent a year.
However, underneath this national number lie vast differences across provinces. While Alberta saw earnings growth of 27 per cent and Saskatchewan topped 44 per cent, Quebec only saw growth of 6 per cent and Ontario suffered a loss of 4 per cent.
When researchers have pushed beyond these basic comparisons, the same essential fact holds up: Without income derived from the resource boom, Canadian inequality and the well-being of the Canadian middle class would be much worse than we’ve experienced.
For the rest of this article: https://www.theglobeandmail.com/opinion/article-resource-jobs-are-sustaining-canadas-middle-class-period/