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Alberta and Saskatchewan expected to lead the country in pay increases for 2015

Alberta and Saskatchewan expected to lead the country in pay increases for 2015

The Conference Board of Canada released its projections for 2015 salary growth in the Compensation Planning Outlook 2015 report published last week [link]. The conference board expects that most Canadians will see a modest pay increases next year, approximately 2.9% for non-unionized workers, which is 1% higher than the rate of inflation.

The Conference Board expects Alberta and Saskatchewan to lead the country in wage gains. As was the case for the past decade, the continued strength of Canada's resource sector is expected to keep labour markets tight in these regions.

Some key highlights of the report:

  • Highest pay increases are projected for the oil and gas sector at 3.9%. The health sector is expected to have the lowest pay increase of 2.2%. The average pay increase for non-unionized Canadians is expected to be 2.9%. The Conference Board of Canada is projecting an inflation rate of 1.9% for 2015.
  • Saskatchewan is projected to have the hottest job market in 2015, followed closely by Alberta. Employees in Saskatchewan can expect a 3.6% pay increase next year. Workers in Alberta are projected to see salary gains of 3.5%.
  • The slowest wage growth is expected in Atlantic Canada, followed closely by Ontario and British Columbia.
  • About 80% of organizations from Alberta and Saskatchewan report difficulty in attracting and retaining employees. This is significantly higher than the Canadian average of 64%.
  • 16% of Canadian corporations expect to hire new employees and expand their workforce in 2015.

Not surprisingly, energy sector workers are expected to receive the highest pay raises next year, estimated at 3.9%. However, Saskatchewan is actually predicted to have a tighter labour market than Alberta, an in turn can expect the highest salary gains in 2015, projected at 3.6%.

PLANNED AVERAGE SALARY INCREASES BY REGION FOR 2015 (Source: Conference Board of Canada)

PLANNED AVERAGE SALARY INCREASES BY REGION FOR 2015
(Source: Conference Board of Canada)

Although Alberta is often best know for its energy industry, Saskatchewan is Canada's second largest oil producer and the 6th largest in North America. Approximately 2.7 million hectares of the Athabasca oil sands basin in northern Alberta extends into Saskatchewan. Saskatchewan also encompasses significantly portions of the the Bakken shale oil formation, shared with its neighbour North Dakota to the south. In 2013, Saskatchewan produced 488,000 barrels of oil per day (bpd), representing approximately 15% of Canada's oil production. That number is expected to rise to 600,000 bpd by 2030.

Apart from crude oil production, Saskatchewan is also a significant producer of potash, uranium, agricultural goods and forestry products. All of Saskatchewan's natural resource sectors compete for labour, as does its oil-rich neighbour to the west, Alberta.

While Alberta has been very successful in attracting talent from across the country and the world, net migration into Saskatchewan has been much slower. Immigration into Saskatchewan remains less than one third that of Alberta. Historically, much of Alberta's labour pool was sourced from BC, Saskatchewan and the Maritimes. Lower wages and higher and higher taxes have traditionally hampered Saskatchewan's population growth. In recent years, however, that tide has been reversing. Saskatchewan's lower cost of living has attracted many workers from across the country, including Alberta. 

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