Ontario’s Utility-Generated Economy

In almost every province of Canada, the utilities sector is one of the highest-paying sets of industries in the economy. In fact, only the oil production sector consistently out-produces utilities occupations and industries.

Ontario is no exception to this trend. While the average wage for the province overall was marginally (~3%) higher than the national average in 2011, occupations in the utilities sector were earning an average of $89,145, 4.3% better than the national average for those occupations. Power production and other aspects of the utilities sector clearly play an important role in the Ontario economy. In fact, according to EMSI data inside Analyst, the Ontario electric power generation, transmission, and distribution industry (NOC-S 2211) has been growing very quickly over the last few years and generating remarkably high average wages. Here’s a quick overview of how jobs in the utility sector are performing:

Unlike some other major industries, though, utilities staffing patterns are focused on a few significant – and, incidentally, highly paid – occupations. In fact, of the more than 200 occupations that have jobs in the utilities sector, four of them (charted below) make up nearly 30% of the entire utilities workforce.

Leading Occupations in Utilities  OccupationEmployed in Industry (2011)% of the Total Jobs in Industry (2011)Electrical power line and cable workers (H214)4,1068.3%Power systems and power station operators (H222)3,8867.9%Supervisors, petroleum, gas and chemical processing and utilities (J012)3,1586.4%Power system electricians (H213)3,1126.3%Source: Employees - EMSI 2012.4 BETA

Given the size of Ontario’s workforce (5.9 million jobs in 2011, the most of any province), the relative numbers do not seem especially impressive. After all, the 37,552 jobs in the electricity production industry are a tiny fraction of 5.9 million jobs in the economy.

The Ontario Power Generation network of facilities, however, is not evenly distributed across the province. Ontario utilities jobs are, as a result, heavily concentrated in a few Census Divisions, which we’ve drilled down into to get a look at the importance utilities occupations have for areas with major power generation facilities. We’ve focussed on the Durham, Bruce, Haldimand, Lennox-Addington, Lambton, Thunder Bay, Rainy River, and Niagara Census Divisions, home to the most significant power-generating facilities in Ontario. Considering the same four occupations as a group across that set of regions, Analyst gave us a good picture of their role in those local economies.

For those of you scoring at home, $32.86 works out to approximately $68,450 a year, extremely respectable in an Ontario economy that paid an average yearly earnings of about $46,000 in 2011. This is still significantly below the $96,414 that all jobs in utilities paid, on average, in 2011. We need to remember, though, that the utilities sector includes a few extremely high-paying, highly skilled occupations that heavily weight the average. For example, the 1,345 utilities managers employed in 2011 earned a whopping average of $50.90 an hour, or nearly $106,000 a year.

We should also notice the very high location quotient for these four occupations; there are nearly six times as many of these jobs in our region than the nation-wide average. But look at the occupations and regions individually, and the LQs get even higher. In the Durham municipality, for example, the LQ for power system electricians was a high 10.35. In the Bruce municipality, meanwhile, the electric power generation industry had a staggering 29.22 location quotient.

Looking To The Future

Clearly the different branches of Ontario’s utilities sector offer a high-paying and important job market for the local economies they’re part of. However, is this a sustainable sector? Ontario has a number of large coal-powered generating plants, including the world’s largest, located in Nanticoke. These plants obviously account for a large percentage of the jobs that utilities contribute to the Ontario economy. However, as a result of recent political developments and environmental considerations, Ontario’s coal-burning power plants have a very limited future. This means that Ontario’s power production load will have to fall on hydroelectric and nuclear power plants.

Fortunately, as EMSI data shows, nuclear power like that provided by the plants currently operating in Pickering, Darlington, and Tiverton is already a pivotal part of the Ontario power-generating economy. Not only are jobs in the Durham and Bruce Census Divisions (home of Ontario’s nuclear plants) paid the same as jobs in other areas, there are significantly more of them.

Looking at those four occupations central to the utilities sector, we see that across Ontario in 2011 there were 49,321 jobs in the utilities industry. Of those, 37,552 were in electrical power generation and transmission. We already noticed that most of these jobs (21,647 of those 37000) were located in those eight power-generating Census Divisions we discussed. But out of those 21,647 jobs, 18,383 are located in the Durham and Bruce Census Divisions. That’s 85% of the power generation industry, all being created by the three nuclear power plants in those two Census Divisions. And they’ve been growing, too — especially Durham, which has nearly doubled its electricity generating industry since 2006, as this chart shows:

The other sector of Ontario’s power generation economy that will be affected by the impending downturn in coal-powered electricity is hydroelectric power. At the moment, Ontario’s hydroelectric system is comprised of a number of smaller stations and a very large plant near Niagara Falls, the Sir Adam Beck Generating Station. While the ongoing renovation of the Beck station (“Big Becky,” as the media has dubbed it) is a costly boondoggle of its own, the facility is already central to the Niagara-area economy. The Niagara Census Division has about 818 power generation jobs as of 2011, significantly fewer than the Bruce or Durham nuclear plants generate.

The Niagara jobs are also paid somewhat less — $82,800 a year, compared to $95,672 in Bruce and $99,908 in Durham. But that $82,800 is still significantly above the national average, and since 2006, jobs in all three Census Divisions have increased at a rate higher than the provincial or national average. Going forward, the hydroelectric and nuclear sectors of the Ontario power generation economy seem ready to continue providing large numbers of highly paid careers to Ontario residents and adding significant financial input to the Ontario economy.

Data and analysis for this post came from Analyst, EMSI’s web-based labour market tool. Follow us on Twitter @desktopecon. Email Fraser Martens if you have any questions or comments, or would like to see further data.