For those following our posts, you know we've been exploring the household energy burden across Canada, along with potential solutions to ease this burden where it is the highest.
Our analysis is based on the annual energy cost for an average Canadian home (considering the average household electricity demand and primary heating source in each province) divided by the median after-tax income in that province.
So far, our energy burden analysis has focused on the numerator—how much households pay out of pocket for energy each year. However, the denominator—the median after-tax income—is equally important. We thought it would be interesting to examine what energy affordability would look like if the median after-tax income in each province matched Alberta's (the highest in Canada).
The results are striking.
But this raises a crucial question: how do we increase median after-tax incomes? While we’re not economists, we would be remiss if we didn’t point out the importance of addressing Canada’s productivity challenge. Canada’s productivity growth is among the lowest of all OECD countries.
So, how do we boost productivity? One approach is to invest in infrastructure. Not only can this spur economic growth and higher wages, but if the focus is on energy infrastructure, it can also help reduce household energy costs—addressing both productivity and energy affordability in one go.