Canadians’ wages took major hit in 2022 amid high inflation rates: StatCan – National

Peak inflation rates in 2022 cost Canadians a major chunk of their wages, according to a new Statistics Canada report.

The report, released Friday, says the Consumer Price Index rose 6.8 per cent on average that year, while median annual wages decreased in most provinces and territories when adjusted for inflation.

The inflation increase in 2022 was a 40-year-high since 1982’s 10.9 per cent hike, according to StatCan. Tax filers in 2022 reported median wages of $45,380, a 1.6 per cent decline from the previous year after adjusting for inflation.

So while on paper wages may have gone up, incomes didn’t go as far when inflation was factored in.

StatCan’s report says the inflation hike took an “outsized bite out of real annual wages, salaries and commissions reported by tax filers in that year.”

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“This decline coincided with a recovery of employment in lower wage sectors in 2022, which followed periods of COVID-19 pandemic-related shutdowns in 2020 and 2021,” the report explains.

Examples of these types of employment were the arts, entertainment and recreation sectors which accounted for 1.6 per cent of total employment in 2022 compared to 1.4 per cent in 2021. Another example was the accommodation and food services sector, which accounted for 7.1 per cent of total employment in 2022, versus 6.3 per cent the previous year.

The report says these types of employment did see wage increases in 2022, but they still remained the lowest in all sectors.


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On Wednesday, the Bank of Canada held its benchmark interest rate steady at five per cent for a sixth straight decision even amid signs that inflation is easing. The central bank signalled a rate cut at its next meeting in June was in the “realm of possibilities” as long as evidence that progress toward its two per cent target is sustained.

Annual inflation has cooled significantly since then, last coming in at 2.8 per cent in February. The overall inflation rate was 2.9 per cent in January, down from 3.4 per cent in December when it accelerated slightly from the previous month.

Canadians working in sectors less affected by the pandemic also saw big hits in their inflation-adjusted median annual wages in 2022, with the largest declines being in educational services and public administration. Both saw a decrease of about 5 per cent.

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Those in transportation, health care, agriculture and construction also saw decreases of around two to three per cent.


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The Northwest Territories had the largest median annual wages decrease, after adjusting for inflation, with a dock of 7.2 per cent. However, the territory maintained the highest median wage in the country.

Yukon followed the NWT with an inflation-adjusted decrease of 4.1 per cent. Alberta saw a decrease of 3.7 per cent, followed by Saskatchewan with 3.6 per cent and Manitoba with a 3.4 per cent decrease.

Some regions saw increases, including Nunavut (+2.0 per cent), Quebec (+1.1 per cent) and New Brunswick (0.9 per cent).

Wages also rose for low-wage workers from 2021 to 2022, but declined for higher-wage earners. Workers in the “upper-middle” of the earnings distribution saw the biggest wage hit when adjusted for inflation, the report says.

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Meanwhile, low-wage workers saw a 10.9 per cent increase in earnings, at the first wage decile and a 5.5 per cent jump at the second decile.

“Despite the decline from 2021 to 2022, inflation-adjusted annual median wages, salaries and commissions were higher in 2022 compared with 2019, the last complete pre-pandemic year, largely due to the combination of relatively strong wage growth and low inflation observed in 2021,” the report explains.

–with files from Global News’ Craig Lord

&copy 2024 Global News, a division of Corus Entertainment Inc.

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