High costs and high wages: Economic realities of Whitehorse and Yellowknife

The cost of living in two of Canada’s most northerly cities, Whitehorse and Yellowknife, is well above the national average. However, while prices may be high, wages are also higher than the national average. Let’s take a closer look at household earnings and expenses in these two cities under the northern lights.

Households in Yellowknife have the highest before-tax discretionary income nationally

Whitehorse and Yellowknife had higher average household income before tax and expenditures, compared with the national average in 2021. The ratio of income before tax to expenditures was also positive in both cities, providing households with more discretionary average income (income after paying taxes and living expenses) than average Canadian households.

Chart 1: Average household income and expenditures are high in Whitehorse and Yellowknife, 2021

On average, households in Whitehorse and Yellowknife spent more in all top five categories than all provinces in 2021

The top five categories for household spending are shelter, food, transportation, household operations and recreation. The average household expenditures in each of these categories in Whitehorse and Yellowknife surpassed the Canadian average in 2021.

Chart 2: Top five categories for average household consumption expenditures, 2021

Affordable housing more prevalent in Whitehorse and Yellowknife than in Canada overall

Residents of Whitehorse and Yellowknife were more likely to live in affordable housing in 2021, with 86.9% of residents in Whitehorse and 88.3% in Yellowknife spending less than 30% of their income on housing. By way of comparison, the Canadian average is 83.2%.

Public administration the leading industry in Whitehorse and Yellowknife

Public administration was the largest employment sector in Yellowknife (29%) and Whitehorse (24%) in 2021, well above the national average of 6.2%. As the capital cities of Northwest Territories and Yukon, public administration is at the forefront of economic development within the region. Important roles include policy development, program management, and public service delivery.

Chart 3: Top eight industries, 2021

In addition to being a major employer, public administration also offers higher wages than many other industries. In Yellowknife, for example, median wages in 2022 for public administration ($106,690) were more than 40% higher than the overall median wage across all industries ($76,550).

Similarly, in Whitehorse, median public administration wages ($81,790) also exceed overall median wages ($61,910). These stable incomes that circulate within the community attract skilled professionals from other regions to further contribute to the local economies.

In Whitehorse and Yellowknife, diverse communities are also experiencing economic success when combined with a bachelor’s degree or higher. Indeed, Indigenous people with a bachelor’s degree or higher in Whitehorse and Yellowknife have a median income of up to 8.4% higher, compared with their non-Indigenous counterparts. 

While women in Whitehorse (-9.6%) and Yellowknife (-9.4%) reported a lower median income than men in 2021, the income gap was lower compared with Canada, where men earn one-fifth (+20.1%) more than women.