Tight labour market, rising cost of living pushing up wages on P.E.I.

At Cows' main shop and production facility in Charlottetown, workers busily press and package T-shirts and scoop ice cream for a tour group that's just arrived.

Since this time one year ago, Cows Inc. CEO Chad Heron said Friday, all his employees have gotten raises averaging about 10 per cent — from the front lines to the front office.

"The inflationary pressures we all felt — rent, gas, all that stuff — was top of mind for people," he said. "So we had to react."

If they hadn't reacted, Heron knew they risked losing employees and not finding enough new hires to get through the busy summer months.

"Last year was by far the hardest we've ever [had] to find people," he said.

"Normally, when we put job ads out, we have a very good reputation, and get lots of applicants. But last year, they weren't there. It was just a very tough year for us, and because of that, obviously you need to be competitive."

That competition for a limited number of workers appears to be fuelling higher wages across Prince Edward Island.

According to the latest numbers from Statistics Canada, average weekly earnings on the Island jumped 5.7 per cent from February last year to this year. That's the highest gain in the country.

In January and February this year, the average weekly wage on P.E.I. rose above $1,000 for the first time ever.

Catching up to Canada 

More than that, since July the weekly wage that for many years has been the lowest in the country has started creeping closer to the national average.

P.E.I. wages are typically 15 to 17 per cent lower than the Canadian average. In February, the gap was just 14 per cent.

Difference between P.E.I. and Canadian average wage

The numbers don't surprise Kelly Hamilton, who helps manage operations at Island Recruiting in Charlottetown.

Hamilton points out inflation has hit P.E.I. harder than any other province over the last year, and that has forced Island employers to increase their wages more — especially as they've become more reliant on attracting workers from outside the province.

"That dynamic has definitely changed. Our rents are higher. The ability to even buy a home has become difficult for the majority of people coming into the province," said Hamilton.

"So we no longer have that ability to say: 'Hey, come on. Our total compensation package might not be as high as the guy in Ontario but look how cheap it is to live here.' We don't have that luxury anymore. So we're having to change."

That's playing out most dramatically in what Statistics Canada calls "professional and scientific services," with average weekly wages up $260 in just seven months, rising to $1,431.

In July, those wages were 27 per cent below the national average, but by February they were only 15 per cent lower.

Rory Francis, CEO of the P.E.I. BioAlliance, says bioscience companies on the Island are rapidly expanding, and trying to compete for a limited number of specialized workers.

"This sector is a growing sector, so we're competing with Boston, Montreal, Toronto, San Diego — and Europe for that matter," he said. "There are a lot of jobs available right now.

"So every employer has to be thinking about how to be a great employer, how to be an employer of choice. And that means benefits. That means appropriate wages for sure. A lot of it has to do with workplace culture as well."

Earnings in service industry down 

Not all industries on P.E.I. are feeling that pressure, though.

According to Statistics Canada, average weekly earnings in the accommodations and food services industry actually dropped from $438 last February to $412 this year.

"We still have a lot of younger people, perhaps a lot of foreign workers....people looking for that entry point into a job or into the country to kind of get settled. So they're willing to take on that job that maybe isn't paying as much in a lower-skilled sector," said Hamilton.

Average weekly wages

"So when you have people who are willing to do the work, you're less motivated to want to change it. Until we see a real crunch in shortages of employees in those sectors, you're probably not going to see wages grow at the rate that the skilled ones would."

Despite that, if the overall wage trend continues, P.E.I. wages could soon come out of the Canadian basement, leaving that spot to a Maritime neighbour.

Average wages in Nova Scotia were just $14 more than P.E.I.'s in February, down from an $81 difference in July.