In the Northwest Territories, families earn the highest incomes in Canada, but financial well-being is not universal across the territory. According to Statistics Canada’s Canada Income Survey for 2023, Northwest Territories had an average household income of $102,100, surpassing all other provinces and territories by over $10,000 and exceeding the national average by $27,900. However, despite this, N.W.T. had the second-highest poverty rate in Canada that year.
Research manager Burton Gustajtis from Statistics Canada noted that historically, families and individuals in the Northwest Territories have had the highest after-tax income in Canada. Nevertheless, the income gap between N.W.T. and the rest of Canada has somewhat narrowed over time, indicating that income growth in the territories has not kept pace with the national average.
The high cost of living in N.W.T. contributes to the elevated wages and salaries in the region, as explained by Yellowknife-based economist Graeme Clinton. The expectation for higher wages in N.W.T. is driven by the need to maintain a comparable quality of life due to the expensive living conditions. Moreover, N.W.T. boasts a higher employment rate than the national average, with more people actively participating in the workforce, partly due to the younger demographic and the unaffordability of not working in the territory.
Despite the high median income in Northwest Territories, poverty rates rank as the second highest in Canada, following Nunavut. This discrepancy is attributed to the cost of living, which influences poverty measurements relative to income levels. Statistics Canada’s Market Basket Measure estimates the cost for a family of four to sustain a modest standard of living, revealing the high costs especially in remote regions like Sahtu and Beaufort Delta.
Income inequality in N.W.T. mirrors the national pattern when comparing the share of total income between higher and lower earners. However, the disparity is more pronounced between Yellowknife and smaller communities within the territory. While Yellowknife exhibits higher average income levels, smaller communities struggle with fewer job opportunities and lower-paying jobs, leading to a higher proportion of families below the poverty line.
Clinton emphasized that income data alone does not provide a complete picture of well-being, as it overlooks the traditional economy’s significance in N.W.T., where the value of subsistence activities like hunting and harvesting is integral to community welfare.