Alberta offers most social mobility opportunities, Quebec the least: study
Canadians’ ability to move up the economic ladder varies widely by province, but according to a recent study from the Montreal Economic Institute, no provinces were worth celebrating.
Canadians’ ability to move up the economic ladder varies widely by province, but according to a recent study from the Montreal Economic Institute, no provinces were worth celebrating.
The MEI ranked each province based on various determinants of social mobility to gain insight into which province best allowed one to climb up the socio-economic ladder.
However, not a single province met the 60 per cent mark.
“Social mobility is what makes the difference between having agency in moving up the income ladder, or being stuck in inherited poverty,” said MEI associate researcher Justin Callais and co-author of the report.
“While some barriers are not directly linked to government policies, many are, and we hope governments will use this ranking as a guide on how to improve their score.”
Callais, who is also chief economist at the Archbridge Institute, said that these barriers can be divided into two streams: natural and artificial.
An example of a natural barrier would be being born into childhood poverty, while artificial barriers stem directly from government policy, such as occupational licensing, educational quality and taxation.
“For example, tightly regulated credit markets limit the ability to raise funds to invest in children (for post-secondary studies, for instance). This favours the better-off, as they can use their own savings to make these investments. Another example is occupational licensing, which restricts entry through expensive courses, lengthy apprenticeships, minimum hour requirements, and registration fees,” reads the study.
“By limiting supply, it raises incumbent incomes while lowering expected returns for new players, especially those at the bottom. Labour market regulations that deter hiring, and high marginal tax rates that reduce after-tax returns to schooling, similarly discourage skill acquisition.”
Alberta was ranked highest among the 10 provinces, with a score of 57.4 per cent. Quebec scored the lowest at 39.7 per cent.
For Alberta, it scored a poor performance for its “occupational licensing and regulatory takings.” Quebec’s most-needed area of improvement was in relation to “housing, construction regulations and taxation.”
The study also noted Quebec’s certification system in the construction industry, which requires workers to “undergo months of training and get a government license for construction jobs, including 13 jobs such as painting and carpentry.”
No other Canadian jurisdictions require certification for those trades.
“With this system, the government is increasing the opportunity cost for would-be workers in trades such as painting and carpentry,” said MEI vice-president of communications Renaud Brossard.
“This is, of course, just one example among many, from one single province. Every time governments reduce opportunities for workers in this way, it makes it harder for them to climb that extra rung on the income ladder.”
In both cases, Alberta and Quebec’s grades lagged as a result of artificial barriers.
The second-highest ranked province for social mobility was British Columbia, followed by Nova Scotia, Manitoba, and Ontario.
Saskatchewan and Prince Edward came in close to one another with scores of 46.9 per cent and 46.6 per cent, respectively, both suffering from taxation issues.
New Brunswick and Newfoundland and Labrador were ranked just ahead of Quebec, with both sharing similar artificial barriers related to “taxation and housing and construction regulations.”
The researchers also applied a penalty to provinces with strong imbalances across all indicators.
“The fact that no Canadian province gets a grade of 60 per cent or higher is an indictment of the web of regulations that have cemented society in place and prevented so many from bettering their situation,” said Brossard.
“Canadians rightly expect to see their hard work pay off. Government policy should not stand in the way of that.”