BC Business
Economy | BCBusiness
Here’s the good news for people working in B.C.: many of us can expect to get a raise next year. Now the bad news: It may not be as much as you received this year, and it’s less than what your friends will get in most other parts of the country, according to a new survey from Toronto-based Hay Group. The projected salary growth for people in B.C. has fallen for the first time in four years to 2.3 per cent for 2014. That’s down from a forecast 2.7-per-cent increase in 2013, 2.5 per cent in 2012 and 2.4 per cent in 2011. B.C.’s results are below the national salary increase forecast of 2.6 per cent, and a far cry from the four-per-cent increase expected in Newfoundland and the hikes of 3.4 per cent and 3.2 per cent in Saskatchewan and Alberta, respectively. Only people living in the Maritimes are expected to get less of a salary increase next year, at 2.1 per cent, according to the survey of more than 500 employers across Canada. “It’s a question of labour market supply and demand. Employers pay what they need to compete for talent,” said Rachel Welch O’Connor, senior principal at Hay Group, a management and human resources consulting firm. While the results seem unfair to people in B.C. given the higher cost of living as compared with other parts of the country, O’Connor says it’s the consequence of so many people choosing to live and work near the mountains and ocean. “Our high cost of living doesn’t translate into higher pay because employers are still able to find and hire people here,” she says. “Plus, there are other things that bring us here.” B.C.’s economy is also more diverse than in places such as Newfoundland, Alberta and Saskatchewan, where salaries are driven higher by competition for skilled labour, in particular in the labour-intensive oil sector, which is booming. B.C.’s economy is more influenced by mining and natural gas, where prices are weaker, particularly in mining where companies have been cutting back in response to a drop in the value of commodities. “Classically we think of ourselves as a resource economy. We aren’t in the same kind of resource boom as some other provinces are,” O’Connor says. Business Council of B.C. chief economist Ken Peacock points out that while the projected salary growth has weakened for B.C. it’s still above inflation, which has fallen to below zero as a result of lower prices for food, clothing and housing in recent months. “I know most consumers won’t believe that, but it’s the reality,” says Peacock. B.C.’s inflation rate is -0.5 per cent, compared with 1.2 per cent for Canada as of June. The unemployment rate is also lower in B.C. compared to its western neighbours. Unemployment in B.C. stands at 6.7 per cent as of July, compared with 4.5 per cent in Alberta and 4 per cent in Saskatchewan. “Employers do have a greater pool to draw from, and that keeps wages down,” says Peacock.
Hay Group 2014 Salary Projections: