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

At Cows' main shopand production facilityin Charlottetown, workersbusily press and package T-shirtsandscoop ice cream for a tourgroup 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 feltrent, 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 losingemployeesand 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 numbersfrom Statistics Canada, average weekly earnings on the Island jumped 5.7 per cent from February last year to this year. That'sthe 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 creepingcloser to the national average.

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

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

Hamilton points out inflation has hit P.E.I. harder than any other provinceover the lastyear, and that has forced Island employers to increasetheir wages more especially as they've become more reliant on attractingworkers from outside the province.

We nolonger 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.Kelly Hamilton

"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.

"Sowe nolonger 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'rehaving 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, saysbioscience companies on the Islandare rapidly expanding, and trying to competefor a limited number of specializedworkers.

"This sector is a growing sector, so we're competing with Boston, Montreal, Toronto, San Diegoand 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 industryactually droppedfrom $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.

"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 wagesgrow 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.