{"id":606780,"date":"2026-04-15T23:47:09","date_gmt":"2026-04-15T23:47:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/606780\/"},"modified":"2026-04-15T23:47:09","modified_gmt":"2026-04-15T23:47:09","slug":"canadas-soaring-wage-growth-not-reality-its-a-statistical-quirk-bmo","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/606780\/","title":{"rendered":"Canada\u2019s Soaring Wage Growth Not Reality, It\u2019s A Statistical Quirk: BMO"},"content":{"rendered":"

Canadians saw their average wage surge at the fastest pace in months, according to Statistics Canada (StatCan)<\/a>. The surge reported in March stands in stark contrast with the reality of other datapoints, and for good reason\u2014wages aren\u2019t booming. The surge was due to a dramatic composition change, according to BMO Capital Markets<\/a>, who warned investors this week that reality is much more modest.\u00a0\u00a0<\/p>\n

Canada\u2019s Wage Growth Surges to 4.7% Amid a Loosening Job Market<\/p>\n

Canada reported a massive wage hike last month, with annual growth reaching 4.7% in March. It was the largest increase since October 2024, when things were rosier across the country.\u00a0<\/p>\n

\u201cIn the roughly year and a half since then, the job market has loosened significantly\u2026 Against that backdrop, a 0.7 ppt acceleration in wage growth in a single month sticks out indeed,\u201d notes BMO Senior Economist Shelly Kaushik.\u00a0\u00a0<\/p>\n

Those skeptical aren\u2019t entirely wrong to question how this conflicts with reality.\u00a0<\/p>\n

Canadian Wage Growth Is Much Lower After Adjustments<\/p>\n

There\u2019s no sudden economic boom sending everyone\u2019s paycheque higher. StatCan explained that this was a statistical quirk that was created by a shift in occupations and job tenure. In other words, the composition rapidly changed, causing the measure to appear much higher than many anticipated.\u00a0<\/p>\n

\u201c\u2026controlling for those factors reveals a 3.6% yearly growth rate, little changed over the last four months,\u201d explains Kaushik.\u00a0<\/p>\n

\"\"<\/a><\/p>\n

Source: StatCan; BMO Capital Markets.\u00a0<\/p>\n

Little change from last year may seem like an improvement with inflation\u2019s moderation. However, recall that headline CPI was 1.8% in February, but it was also impacted by a composition issue. Excluding gas, CPI came in at 2.6%\u2014before the temporary base effect from the carbon tax removed 0.7 points, according to the Bank of Canada<\/a>. It may not be quite the windfall previously presented. What happened?\u00a0\u00a0\u00a0<\/p>\n

Migration and Aging Workforce Skewed The Average<\/p>\n

Two major factors played a role in this distortion: immigration and a rapidly aging workforce. The recent pullback on non-permanent residents has disproportionately removed low-income wage earners from the measure. Job losses have also largely been concentrated in more entry-level and low-skilled roles, leaving fewer people with modest incomes to pull the averages down.\u00a0<\/p>\n

\u201cThis jibes with some macro trends: recent net outward migration disproportionately affects workers (e.g., temporary foreign workers and students) in lower-paying jobs,\u201d explains the bank. \u201cTogether with underlying aging, that could also skew the pool of employees towards those who have been in their jobs for longer.\u201d\u00a0\u00a0<\/p>\n

Canada has seen an unusually sharp uptick in aging in its most expensive cities, like Toronto<\/a>. The older, more experienced workforce isn\u2019t necessarily benefiting from sharp wage hikes, but their tenure drags the average higher.\u00a0<\/p>\n

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