It’s well-established that Alberta leads the country on most measures of economic prosperity. Statistics Canada’s latest estimates of household income – which cover the period up to 2024 – confirm that this continues to be true for the most commonly cited indicator of economic well-being – “real” (inflation-adjusted) household income.
The first accompanying figure reports real median household income by province, on an after-tax basis, measured in 2024 dollars, for Canada and the six biggest provinces. The “median” is the household located at the exact mid-point of the overall income distribution; it can be thought of as capturing the situation of the “typical” household. Households consist of both families and unattached individuals living alone or with an unrelated person.
Figure1
At $85,300 in 2024, the median Alberta household enjoyed an after-tax income $9,800 greater than the national average, more than $9,500 higher than in British Columbia, and $5,800 higher than in second-place Ontario. The lowest after-tax incomes are in the Atlantic provinces (not shown in Figure 1).
As noted by ATB Economics, the reasons for Alberta’s outsized incomes include a younger population, a larger proportion of working-age residents, and the highest levels of productivity (the value of output per hour worked) and employment (the share of the population with a job) in Canada. To this list, ICBA would add Alberta’s comparatively attractive business environment, which features a lower tax burden than in other provinces and a government policy mix that is more supportive of business growth and entrepreneurial activity than is the case in other large provinces (Ontario, Quebec, and B.C.).
The size, growth, and economic success of the broad energy sector – consisting of oil and gas extraction, processing/refining, and the pipeline industry – has played a key role in elevating Alberta to the top of the Canadian income leaderboard. Not only does energy account for a large share of the province’s economy, but it happens to be an unusually high value-added, high-productivity, high-paying industrial sector. Moreover, most of the energy produced in Alberta is exported, creating a valuable stream of externally-generated income that flows back to the province (and to the rest of Canada). These characteristics of Alberta’s energy sector serve to augment its economic impact and produce benefits for many of the households that make up the province’s population.
Even so, while Alberta comfortably tops the Canadian income charts, inflation-adjusted median household income declined over the last decade -- in contrast to Canada and most other provinces (Figure 2 provides the details). Specifically, real after-tax income for the typical Alberta household fell by 3.2% from 2020 to 2024 and was 8.4% lower in the latter year than in 2015. Other provinces also experienced declining median household incomes between 2020 and 2024, but unlike Alberta, they managed to post modest gains over the longer period 2015-2024.
Figure 2
To some extent, the drop in median incomes in Alberta reflects the broader stagnation of Canada’s economy since 2015. Surging population growth also exerted a depressing effect on median household incomes in Alberta and other provinces in the post-2020 period. (This is so because many newcomers either don’t work or, if employed, earn only modest incomes in the first few years after arriving in Canada.) Alberta’s weak showing on income growth also speaks to the adverse consequences of the epic 2014-15 oil price collapse, the sharp related downturn in investment in the oil sands, pipeline constraints that weighed on growth in the energy industry and the aggregate Alberta economy, and federal government climate and regulatory policies that hurt the energy sector.
Looking ahead, there are reasons to be optimistic about the outlook for incomes in Alberta. The province boasts the most competitive business climate in the country. Alberta seems to have found common ground with the Carney government in Ottawa on the need to boost oil production and build new egress capacity to ship more Alberta oil – at least another 1 million barrels per day -- to external markets. The federal government is working with B.C. to build-out a global-scale liquefied natural gas industry that will provide a much-needed export outlet for Alberta natural gas. There are also positive developments in several other Alberta industrial sectors, including AI, clean technology, agri-food, advanced manufacturing, and digital services. These trends should benefit all parts of Alberta’s diverse construction sector – homebuilding, commercial and industrial, institutional building, and engineering construction – over the rest of the decade and into the 2030s.