Jim Sentance, associate professor of economics at UPEI, said it may be difficult for Canada to continue the route of monetary policy since the U.S. Federal Reserve raised its interest rates for the first time since 2006.
Healthy economy helped province enjoy largest wage growth countrywide
A comparatively healthy economy in P.E.I. has helped the province enjoy the largest wage growth in the country over the past year, says a labour economics expert.
"At the moment I think the P.E.I. economy is doing relatively well compared to other provinces. Exports and tourism are doing well,'' says Jim Sentance, associate professor of economics at UPEI.
P.E.I. has led the country with wages jumping 3.2 per cent in a year, according to Statistics Canada data.
The province's wage growth, however, is made easier by the fact it's starting low. At $805 a week, P.E.I.'s average earnings are about 15 per cent below the national average of $950 a week.
But the province is heading in the right direction, notes Sentance.
"I think it may be a bit of a trend,'' he says.
"It's just sort of continuing to try to build on our strengths. It helps if we can diversify the economy a little bit.''
Sentance notes the province has had a fairly good couple of years in manufacturing.
P.E.I. also grew its employment rolls by 1.2 per cent over the last year by adding roughly 700 actual new positions.
And a number of those jobs pay a decent wage.
For example, Invesco, an independent global investment management firm in Charlottetown, has been ramping up its workforce over the past year.
Erin McGrath-Gaudet, P.E.I. director for the Canadian Federation of Independent Business, says the wage growth numbers are encouraging, but she still approaches the data with a bit of caution.
"We do see average wage results fluctuate both up (usually) and down, but an upward trend is encouraging,'' she said. But, she added, she is not surprised P.E.I. remains below the national average.
McGrath-Gaudet says the hike in average wages in P.E.I. coincides with the reasonably good small business expectations seen in the province throughout 2015.
"Typically, when businesses are doing well, wages respond,'' she explained.
"Our members in P.E.I. typically say that the first thing that they do with extra money in their business is to increases wages.''
Mary Boyd of the P.E.I. Coalition for Poverty Eradication Strategy says the wage increase is positive, but the overall wage picture in the province is not cause for rejoicing.
"We still have such a long road ahead for (wage) parity that I don't think it's a big deal (to lead the country in wage growth over one year),'' she says.
The wage growth in Prince Edward Island is also being helped at the lowest end of the pay spectrum.
Sentance notes P.E.I. has been as aggressive as any province in raising the minimum wage.
And that will continue this year. Minimum wage will increase by 50 cents over the course of 2016.
The wage is currently $10.50 an hour. It will go up twice in 2016, to $10.75 on June 1 and $11 on Oct. 1.
That would make the minimum wage in P.E.I. the highest currently in Atlantic Canada.