Tax structures and regulatory environments are usually top of mind when it comes to concerns about the competitiveness of both British Columbia and the country as a whole. However, one often overlooked metric that helps define a jurisdiction’s competitiveness is the ease with which people can move up into new income brackets.
According to a report by the Organization for Economic Co-operation and Development(OECD), the factor with the biggest effect on growth “is the widening gap between the lower middle class and poor households compared to the rest of society.”
In 2018, Canada was among four OECD countries in which people in the bottom income group had the most difficulty moving up into a new income bracket.
Canada scores high on mobility over generations, meaning generally children are better off than their parents. However, the country has lower scores than other OECD countries when measuring the ability for individuals to move up into a new income bracket within their lifetime. While people in the top income category have generally been able to maintain this status, those in the bottom group have a low likelihood of moving up. In fact, the likelihood of these individuals moving out of the bottom quintile has fallen since the 1990s, according to the OECD report.
Within Canada, most of the regions with the lowest income mobility are located in Quebec, Manitoba and British Columbia.
There are 16 regions where people have less than a 5% chance of moving from the bottom group to the top group, two of which are in British Columbia. The Stikine region has the lowest transition probability in the country and the Central Coast Regional District has the third lowest.
