A peril of writing on economics and finance is that friends from Outside who visit you on their summer holidays tend to gather around the campfire, crack open a beer, and ask questions like, “How do incomes and the cost of living in Whitehorse compare to Vancouver?”
Fortunately, the kind souls at the Yukon Bureau of Statistics put out their much awaited (by me, anyway) annual Yukon Statistical Review the day before the Canada Day long weekend.
It’s an interesting question that highlights some commonly held, but not always accurate, beliefs about the Yukon. Regular tourists may think we live in igloos and get chased by polar bears, but visiting econometricians seem to think we are poor and pay a lot for breakfast cereal.
The average weekly earnings in the Yukon in 2016 were $1,053.75. That’s 10 per cent higher than the national average. It’s also better than all the provinces except oil-rich Alberta, which clocks in at $1,118.57. The next two provinces in line after the Yukon, Newfoundland and Saskatchewan, also have big energy industries.
The Yukon doesn’t have much oil and gas production at the moment, but we’ve hit a gusher of another kind: transfer payments. As of December 2016, the sector with the highest average weekly earnings was public administration. Workers in this sector took home $1,344.25 on average, almost 30 per cent higher than the overall Yukon average.
Yukoners in the accommodation and food services industry, at the other end of the scale, earned $448.12 per week on average.
Income inequality is a big issue these days. If you look at a different source of data based on tax returns, Yukoners turn out to be more closely bunched in the middle of the income distribution than Canada overall. Only 0.9 per cent of taxfilers in the Yukon have total incomes over $200,000 per year, based on Statistics Canada definitions, compared to 1.5 per cent nationally.
Meanwhile, there were about 4,000 Yukoners who filed total incomes below $15,000 in 2016. That is a big number of people with incomes that make it very hard to make ends meet given the cost of living here. In statistical terms they are 14.8 per cent of our population compared to a significantly higher 21.5 per cent across Canada.
So, remembering the big caveat that averages hide a lot of people on low incomes and not all people file tax returns, Yukoners do relatively well compared to the rest of Canada on income.
However, as the denizens of Iqaluit could tell you, a higher wage isn’t much use if prices are higher too. So how much higher is the cost of living in the Yukon than in the provinces?
Contrary to tales from the old days, the cost of day-to-day goods in Whitehorse is not that much higher than Vancouver. Improvements to the Alaska Highway, improved truck performance and the amazingly efficient supply chain practices of outfits like Walmart and Amazon have made a big difference.
To calculate its isolated post allowance, the federal government calculates a living cost price index based on a basket of typical household goods. In October 2016, Whitehorse was less than 15 per cent more expensive than B.C.’s biggest city. We don’t know exactly how much, since workers in cities below 15 per cent don’t qualify and the details aren’t published.
The communities, on the other hand, are significantly more expensive than Vancouver. Carcross is estimated to be 15-19 per cent more costly, while Old Crow tops the chart at 70-74 per cent harder on the wallet.
The figures above are just for routine household expenses. They don’t include what is probably your biggest expense: housing. While nowhere near Vancouver levels, Whitehorse housing is considerably more expensive than houses in roughly similarly sized towns in central and northern B.C., at least for those who purchased after the surge in prices over the last decade or so.
So if you collect an above-average Yukon salary, shop in Whitehorse, and bought your house before about 2005, you should consider yourself fortunate.
The next campfire question that came up was about taxes.
We don’t have a territorial sales tax, compared to a levy of 6-10 per cent in your typical province, and our gasoline tax is the lowest in the country.
The Yukon income tax rate for someone making the median Yukon income of about $45,000 is 6.4 per cent. For example, the rate for that income level is 7.7 per cent in B.C., 9.15 per cent in Ontario, 10 per cent in Alberta and 16 per cent in Quebec.
I think our campfire chat almost convinced my friend to move here, until he woke up the next day and saw the thermometer on one of our recent “summer” mornings.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.