Perhaps you’ve heard the same ads I have: The Alberta government inviting BC people to move there.
You may have wondered: why would a province want to recruit immigrants, from BC or anywhere? And secondly, why would BC people be inclined to take them up on the invite?
The first question has an easy answer: Increased population increases the tax revenue for the province more than its costs, thus enriching the province’s coffers (read, balancing the budget). It then also contributes to their influence in the country.
While the second question has a variety of answers, the biggest draw is because wages are higher and costs lower in Alberta, compared with those in BC. The financial squeeze BCers find themselves in can be significantly mitigated with a move to Alberta.
So, why does BC have low wages and high costs while Alberta has high wages and low costs? There are at least six reasons for this, maybe more.
- Because of our geography, we have limited space on which to house people and industry, at least in the Southwest corner where the bulk of our population wants to be, while the prairies have virtually unlimited space. This means the competition for every plot of land is far more intense, driving up land prices far beyond those for equivalent land on the prairies.
This is exacerbated by our Agricultural Land Reserve that prevents residential, industrial and commercial development on agricultural lands. While this may protect our agriculture, it further reduces the available land for other purposes, driving up that competition and adding further to their value.
- Also because of our mountainous geography, it is much more expensive to build infrastructure in this part of the world. I’ve often marvelled at the length of time it takes and the phenomenal costs to build roadworks, just one aspect of infrastructure. On the prairies, it is much cheaper and much faster, but there aren’t the same challenges of terrain, geology and especially the maintaining of water run-off patterns (further exacerbated by our much wetter climate) during construction.
- And, speaking of climate, our climate makes at least the Southwest corner of the province an appealing place for people to live. This attraction puts additional pressure on the land, reinforcing the spiral of increasing land values. It’s a trade-off many people simply accept; they pay more to get the climate and lifestyle they want.
- As a corollary of this, with more people willing to accept whatever costs and conditions are extant simply to enjoy the BC weather and lifestyle, there is less pressure on the job market, and therefore, less pressure driving up wages to keep employees happy. Witness the usual reasoning we hear from the unions in contract negotiation, focussed more often than not, on wage comparisons with other provinces than on the fundamentals.
It’s not that BC has a surplus of employees, it’s simply that employers, including governments, don’t have to do as much to keep them happy.
- With the oil boom of the 1970s and 80s, Calgary surpassed Montreal as the No. 2 financial and business centre of Canada (behind Toronto, of course) and has maintained that status. (I’m not sure, but Vancouver may be 4th in Canada, but still far behind Calgary). With the large number of high-level corporate jobs and their high salaries, there is more money flowing into the economy, and that has a trickle down effect throughout their whole economy.
- We choose to have higher costs and lower wages with our philosophical and political orientations. For one, our culture is much more inclined toward government involvement and oversight than individual initiative. Collective/bureaucratic oversight, while perhaps levelling the playing field somewhat, is never as efficient as individual initiative. (This is a much larger topic than can be discussed in this post—and was a part of my PhD studies in economic geography–but has been proven both logically and historically.)
Alberta culture tends to be on the other side of that divide; therefore, their economy develops more efficiently. Bottom line: we willingly sacrifice economic efficiency more than they in order, hopefully, to create more equality.
In addition, our greater environmental sensitivities mean that we accept higher prices than would otherwise be necessary. For example, gas prices are much higher here partly because we refuse to allow local refineries to supply our needs. Thus, we are vulnerable whenever there is a supply challenge at the Washington and Alberta refineries on which we depend.
These environmental sensitivities also mean that we more willingly accept additional taxes such as those that are charged at the gas pump. With the increased prices, everything that depends on transportation also becomes more expensive, so nearly all our products have the upward price pressure. The additional taxes we pay for our collective orientation are widespread, though, not limited to those related to fuel.
Those environmental sensitivities also contribute to the higher costs of infrastructure development.
Put that all together, and the result is higher costs and lower wages here than in Alberta. A move to that province may be an appealing proposition for those who are willing to sacrifice the climate and lifestyle of our part of the world, for a more affordable one.
And for those who are forced to.
For the rest of us, let’s be thankful that we can afford to choose the luxury of paying more to live the lifestyle we’ve chosen.
