October 2021

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CENTRE FOR THE
STUDY OF LIVING
STANDARDS

The Index of Economic Well-being for
New Brunswick, 1981-2019

Andrew Sharpe
CSLS Research Report 2021-08
October 2021

1

The Index of Economic Well-being for
New Brunswick, 1981-2019
Table of Contents
Abstract ......................................................................................................................................4
List of Charts ..............................................................................................................................5
List of Tables ..............................................................................................................................6
List of Exhibits............................................................................................................................7
Executive Summary ....................................................................................................................8I.

The Index of Economic Well-being: Motivation and Framework ....................................... 13II.

Overall Trends in the Index of Economic Well-being ........................................................ 19
A. Index of Economic Well-being ....................................................................................... 19
B. The Four Domains of the IEWB ..................................................................................... 22

III.

Trends in the Consumption Flows Domain ..................................................................... 24

A. Personal Consumption .................................................................................................... 25
B. Average Family Size ...................................................................................................... 26
C. Government Expenditures .............................................................................................. 27
D. Unpaid Work .................................................................................................................. 31
E. Regrettable Expenditures ................................................................................................ 34
F. Life Expectancy.............................................................................................................. 36
G. Total Consumption Flows............................................................................................... 37
IV.

Trends in the Stocks of Wealth Domain .......................................................................... 42

A. Physical Capital .............................................................................................................. 44
B. R&D Capital .................................................................................................................. 46
C. Natural Resources........................................................................................................... 47
D. Net International Investment Position ............................................................................. 49
E. Human Capital ............................................................................................................... 51
F. Social Cost of Environmental Degradation ..................................................................... 542

G. Total Wealth Stocks ....................................................................................................... 58
V.

Trends in the Economic Equality Domain.......................................................................... 62
A. Income Inequality ........................................................................................................... 63
B. Poverty Intensity ............................................................................................................ 66
C. Index of Economic Equality ........................................................................................... 69

VI.

Trends in Economic Security Domain............................................................................. 71

A. Risk from Unemployment .............................................................................................. 72
B. Financial Risk from Illness ............................................................................................. 76
C. Risk from Single-Parent Poverty..................................................................................... 79
D. Risk from Poverty in Old Age ........................................................................................ 83
E. Index of Economic Security............................................................................................ 86
VII.

Conclusion ..................................................................................................................... 89

References ................................................................................................................................ 92

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The Index of Economic Well-being for
New Brunswick, 1981-2019
Abstract
This report presents estimates of the Index of Economic Well-being (IEWB) and its fourdomains (consumption flows, stocks of wealth, economic equality and economic security) for
New Brunswick from 1981 to 2019. We find that the IEWB for New Brunswick increased at an
average annual rate of 1.34 percent per year over the period. Among the four domains thatcompose the IEWB, consumption and equality have had positive growth rates, while the wealthdomain and the security domain have had small falls. The consumer domain had the highest
growth rate (4.31 percent per year) and the equality domain had a growth rate of 1.81 percent per
year over the period. The wealth domain declined by 0.24 percent per year and the security
domain declined by 0.27 percent per year between 1981-2019. In 2019, among the provinces,
New Brunswick is in ninth place, but the province stands out with the second highest ranking interms of equality. In terms of growth rates, the province had the third highest growth rate in the
IEWB between 1981-2019. It also had the second highest growth rate among the provinces in the
consumption domain and the best growth rate in the equality domain.

4

List of Charts
Chart 1: Index of Economic Well-being by Province, 2019 ....................................................... 19
Chart 2: Index of Economic Well-being in Newbrunswickand Canada, 1981-2019 ................... 20
Chart 3: Compound Annual Growth Rates of the Index of Economic Well-being and
GDP per Capita in Newbrunswick, 1981-2019 .......................................................................... 21
Chart 4: Domains of the Index of Economic Well-being in Newbrunswick 1981 and2019 .......................................................................................................................................... 22
Chart 5: Components of the Consumption Domain in Newbrunswick, 1981, 2000, 2008,2014 and 2019........................................................................................................................... 24
Chart 6: Personal Consumption Per Capita by Province, 2019 ................................................... 25
Chart 7: Personal Consumption Per Capita in Newbrunswick and Canada, 1981-2019 .............. 26
Chart 8: Average Economic Family Size in Newbrunswick and Canada, 1981-2019 ................. 27
Chart 9: Government Expenditures per Capita by Province, 2019.............................................. 28
Chart 10: Government Expenditures per Capita in Newbrunswick and Canada, 1981-2019 ....... 28
Chart 11: Value of Unpaid Work per Capita by Province, 2019 ................................................. 32
Chart 12: Value of Unpaid Work per Capita in Newbrunswick and Canada, 1981-2019 ............ 33
Chart 13: Unpaid Work Wage Rate in Newbrunswick and Canada, 1981-2019 ......................... 34
Chart 14: Hours of Unpaid Work in Newbrunswick , 1981-2019 ............................................... 34
Chart 15: Regrettable Expenditures per Capita by Province, 2019 ............................................. 35
Chart 16: Regrettable Expenditures per Capita in Newbrunswick and Canada, 1981-2019 ........ 36
Chart 17: Life Expectancy at Birth in Newbrunswick and Canada, 1981-2019 .......................... 37
Chart 18: Total Consumption (Adjusted) per Capita by Province, 2019 ..................................... 38
Chart 19: Total Consumption Flows per Capita in Newbrunswick and Canada, 1981-2019 ....... 39
Chart 20: Components of the Stocks of Wealth Domain for Newbrunswick in 1981,
2000, 2008, 2014, and 2019 ...................................................................................................... 43
Chart 21: Net Capital Stock per Capita by Province, 2019 ......................................................... 44
Chart 22: Net Capital Stock per Capita in Newbrunswick and Canada, 1981-2019 .................... 45
Chart 23: R&D Stock per Capita by Province, 2019 .................................................................. 46
Chart 24: R&D Stock per Capita in Newbrunswick and in Canada, 1981-2019 ......................... 47
Chart 25: Natural Resources Stock per Capita by Province, 2019 .............................................. 47
Chart 26: Natural Resources Stock per Capita in Newbrunswick and in Canada, 1981-2019 ..... 48
Chart 27: Net International Investment per Capita in Newbrunswick and Canada, 1981-2019 ... 50
Chart 28: Net International Investment per Capita in Newbrunswick and Canada, 1981-2019 ... 51
Chart 29: Human Capital Stock per Capita by Province, 2019 ................................................... 52
Chart 30: Human Capital Stock per Capita in Newbrunswick and Canada, 1981-2019 .............. 52
Chart 31: Total Social Cost of Greenhouse Gas Emissions per Capita by Province, 2019 .......... 55
Chart 32: Social Cost of Greenhouse Gas Emissions per Capita in Newbrunswick andCanada, 1981-2019 ................................................................................................................... 57
Chart 33: Total Wealth per Capita by Province, 2019 ................................................................ 58
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Chart 34: Total Wealth per Capita in Newbrunswick and Canada, 1981-2019 ........................... 59
Chart 35: Components of the Economic Equality Domain in Newbrunswick, 1981, 2000,
2008, 2014 and 2019 ................................................................................................................. 62
Chart 36: Index of Income Equality by Province, 2019.............................................................. 64
Chart 37: Index of Income Equality in Newbrunswick and Canada, 1981-2019 ......................... 65
Chart 38: Index of Poverty by Province, 2019 ........................................................................... 66
Chart 39: Index of Poverty and its Subcomponents in Newbrunswick and Canada, 1981-2019 .. 68
Chart 40: Index of Economic Inequality by Province, 2019 ....................................................... 69
Chart 41: Index of Economic Equality in Newbrunswick and Canada, 1981-2019 ..................... 70
Chart 42: Components of the Economic Security Domain in Newbrunswick andLabrador, 1981, 2000, 2008, 2014, 2019 ................................................................................... 72
Chart 43: Index of Security from the Risk Imposed by Unemployment by Province, 2019 ........ 73
Chart 44: Risk from Unemployment and its Subcomponents in Newbrunswick and Canada,
1981-2019 ................................................................................................................................. 74
Chart 45: Index of Security from the Risk Imposed by Illness by Province, 2019 ...................... 77
Chart 46: Risk from Illness in Newbrunswick and Canada, 1981-2019 ...................................... 78
Chart 47: Index of Security from the Risk Imposed by Single-Parent Poverty by
Province, 2019 .......................................................................................................................... 80
Chart 48: Risk from Single-Parent Poverty and its Subcomponents in Newbrunswick andCanada, 1981-2019 ................................................................................................................... 80
Chart 49: Index of Security from the Risk Imposed by Poverty in Old Age by Province, 2019 .. 83
Chart 50: Risk from Poverty in Old Age and its Subcomponents in Newbrunswick andCanada, 1981-2019 ................................................................................................................... 84
Chart 51: Index of Economic Security by Province, 2019 .......................................................... 86
Chart 52: Index of Economic Security by Province, 1981-2019 ................................................. 87

List of Tables
Table 1: Compound Annual Growth in the Domains of the Index of Economic Well-being in
New Brunswick, 1981-2019 ...................................................................................................... 23
Table 2: Sub-Components of Government Expenditures per capita in New Brunswick, 19812019 .......................................................................................................................................... 30
Table 3: Summary of Consumption Components in New Brunswick, 1981-2019 ...................... 41
Table 4: Sub-Components of Net Capital Stock per Capita in New Brunswick, 1981-2019 ....... 45
Table 5: Sub-Components of Total Natural Resources per Capita in New Brunswick, 1981-2019................................................................................................................................................. 49
Table 6: Sub-components of Human Capital per Capita in New Brunswick, 1981-2019 ............ 53
Table 7: Summary of Stocks of Wealth Components per Capita in New Brunswick, 1981-201960

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Table 8: Summary of Components of the Economic Equality Domain in New Brunswick, 19812019 .......................................................................................................................................... 71
Table 9: Summary of Components for the Risk Imposed by Unemployment for New................ 76
Table 10: Summary of Components for the Index of Risk imposed from Illness, for New
Brunswick, for 1981, 2000, 2008, 2014, 2019 ........................................................................... 79
Table 11: Summary of Components of the Index of Risk from Single Parent Poverty for New
Brunswick, for 1981, 2000, 2008, 2014, 2019 ........................................................................... 82
Table 12: Summary of Components for the Risk from Poverty in Old Age for New Brunswick,for 1981, 2000, 2008, 2014, 2019 .............................................................................................. 85
Table 13: Weights associated to each risk of the Index of Economic Security for New Brunswick
and Canada, for 1981 and 2019 ................................................................................................. 86
Table 14: Summary of Components of the Economic Security Domain in New Brunswick, 19812019 .......................................................................................................................................... 88

List of Exhibits
Exhibit 1: Ranking by Index of Economic Well-being and its Components, Canada and theProvinces .................................................................................................................................. 11
Exhibit 2: Conceptual Framework for the Index of Economic Well-being ................................. 15
Exhibit 3: CSLS Index of Economic Well-being, Weighting Tree for Canada and the Provinces................................................................................................................................................. 18
Exhibit 4: Ranking by Index of Economic Well-being and Per-Capita GDP, Canada and theProvinces .................................................................................................................................. 21
Exhibit 5: Ranking by Index of Economic Well-being and its Components, Canada and theProvinces .................................................................................................................................. 91

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The Index of Economic Well-being for
New Brunswick, 1981-20191
Executive Summary
In 1998, the Centre for the Study of Living Standards (CSLS) released the first estimatesof the Index of Economic Well-being for Canada (Osberg and Sharpe, 1998), which is acomposite index based on a conceptual framework developed by Osberg (1985). Over the past
sub-period, the CSLS has extended the geographical coverage of the Index to the Canadianprovinces and to major OECD countries and has made a number of methodological changes tothe Index.
The IEWB is comprised of four domains of economic welfare: per-capita consumption,
per-capita wealth, economic equality, and economic security. These four domains reflecteconomic well-being in both the present and the future, and account for both average access toeconomic resources and the distribution of that access among members of society. By basing the
IEWB on data from each of these domains, we attempt to capture the multifaceted nature of
economic well-being. Our domain approach also allows individuals to assign weights inaccordance with their value judgments (e.g., consumption versus economic equality).
This report presents updated estimates of the IEWB for New Brunswick over the 1981 to
2019 period, with a particular emphasis on developments post-2000. The report outlines trends inthe four domains of economic well-being that make up the IEWB. This report finds that
economic well-being in New Brunswick has improved significantly between 1981 and 2019.

Trends in the Index of Economic Well-being, 1981-2019
Since 1981, the IEWB for New Brunswick has enjoyed considerable growth. The overall
IEWB rose 0.189 points from 0.288 in 1981 to 0.477 in 2019. This improvement is the result of
the growth rate of 1.34 per cent per year over the period. However, growth of the IEWB
fluctuated over the period:•

1981-2000: The IEWB for New Brunswick grew 2.25 per cent per year from 0.288 in
1981 to 0.439 in 2000. The IEWB saw the fastest growth in this sub-period.

1

This report was prepared by CSLS Executive Director Andrew Sharpe, with assistance from Nettie Bonsall andAbderrahmane Marzeh. The CSLS would like to thank the Crabtree Foundation for financial support.

8

•
•
•
•

•

2000-2019: The IEWB grew 0.4 per cent per year from 0.439 in 2000 to 0.477 in 2019.
The IEWB experienced faster growth in the period before 2000.
2000-2008: The IEWB increased 0.6 per cent per year from 0.439 in 2000 to 0.463 in
2008.
2008-2019: The IEWB grew at an annual rate of 0.3 percent per year.
2008-2014: The IEWB decreased by 0.3 percent per year from 0.463 in 2008 to 0.455 in
2014. This is the only subperiod when the IEWB had a decline. This is due to the fall in
the wealth domain of 3.7 percent per year which is caused by the decline in the natural
resources stock and the increase in greenhouse gas emissions.
2014-2019: The IEWB grew at an annual rate of 1 percent per year. This is the second
highest growth rate for all subperiods combined. This growth is mainly the effect ofgrowth in the equality and security domains. These two domains had the highest growthof all other sub-periods.

Trends in the Four Domains of the Index of Economic Well-being, 1981-2019
The overall increase in economic well-being can be explained by the growth inconsumption and equality. The domains of economic wealth and economic security decreased
between 1981-2019.
•

The index of consumption had the highest growth among the components of the IEWB.
The scaled consumption domain increased 0.502 points or 4.31 per cent per year from
0.127 in 1981 to 0.629 in 2019. This growth was driven primarily by the increases inpersonal consumption per capita, in government expenditure per capita and in unpaid
work per capita over the period. Growth in the index of consumption was much higher
between 1981-2000 (6.96 percent per year) than between 2000-2019 (1.73 percent peryear). This can be explained by the fact that on the one hand the growth rates in personal
consumption per capita, in government expenditures per capita and in unpaid work per
capita were lower in 2000-2019 than in 1981-2000 (the last component even had a fall)and on the other hand the regrettable expenditures per capita were higher after 2000
(Table 3, Panel C).

•

The wealth domain had a fall of -0.24 percent per year between 1981-2019. The index of
wealth decreased 0.017 points from 0.198 points in 1981 to 0.181 points in 2019.
Between 1981-2000 the province grew by 1.04 percent per year, however between 20002019 the province experiences a drop of -1.5 percent per year. During this second period,
the largest reduction was between 2008-2014 (-3.7 percent per year). This decrease is
explained by the fact that during this period, the natural resources stock had the largest
decrease in growth (-8.7 percent per year), reflecting the plunge in oil prices and also
because the largest increase in growth in net international investment (19.25 percent per
9year), the largest the province experienced for the overall period. At the end of thesecond period, specifically between 2014-2019, the province had a growth rate of 1
percent per year, explained by the significant decline of 4 percent per year in net
international investment (Table 7, Panel C).
•

The index of economic equality had the second-best growth among the domains thatcompose the IEWB. The index growth over the overall period was 1.81 percent per year,
showing an increase of 0.322 points from 0.329 points in 1981 to 0.651 points in 2019.
This improvement is explained by the larger increase in the growth rate of the index ofpoverty intensity for the overall period (2.3 percent per year) compared to the growth of
the index of income inequality (0.75 percent per year). The growth of the index of
economic equality stands out between 2014-2019 with an annual growth of 3.4 percent
per year, thanks to the growth of the index of poverty during these years of 4 percent per
year (Table 8, Panel C).

•

The index of economic security decreased by 0.27 percent per year between 1981-2019
or 0.048 points from 0.497 points in 1981 to 0.449 points in 2019. This decrease ismainly due to the decline over the period in the index for the risk imposed by illness (2.77 percent per year) which is weighted the most among the components of the index of
economic security. The same explanation is valid for the largest decline in the index of
economic security of -1.21 percent per year between 2000-2008. During this period, thefall in the risk caused by illness was 5.5 percent per year. Between 2014-2019, the index
of economic security had its negative growth of -0.6 percent per year. This has two
explanations, the first being the decrease of the index for the risk of illness (-6.4 percent
per year) and the second reason is the largest growth of the index of the risk imposed byunemployment (2.7 percent per year) (Table 9, Panel C), which has the second highest
weight in the calculation of the index of economic security.

In summary, the indices in the domains of wealth, equality, security have had their best
growth rate between 2014-2019. Only, the consumption index had its best growth between 19812000. As for the lowest growth rates for the indices, the consumption and wealth domains had it
towards the end of the period between 2014-2019 (0 and 0.3 percent per year) and 2008-2014(0.4 and -3.7 percent per year) respectively. For both equality and security, the lowest growthrate was between 2000-2008. Finally, comparing the growth rates of the indices between the two
sub-periods, pre-2000 and post-2000, the growth rates for all domains were stronger in the first
sub-period.

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Rankings for the Index of Economic Well-being by Province, 1981-2019
Based on index levels in 2019, New Brunswick generally ranked near the bottom of the
rankings. The New Brunswick IEWB index ranked ninth among the provinces in 2019.
Regarding the components of the IEWB, although the province experienced a high rate of
growth in consumption between 1981-2019, among the provinces, its index ranked ninth. The
best place the province was able to achieve in 2019 was second place with its index of economic
equality.
In terms of growth rates between 1981-2019, the province managed to gain better places
than the places obtained based on absolute index values. This can be seen as a catch-up effect. In
terms of growth rate in the IEWB, the province placed third. For the components of the IEWB,
the worst place occupied (eighth among the provinces) was in the growth rate of wealth.
Followed by the place occupied in the growth rate in the index of economic security (fifth place)and finally the second place for the growth rate in the field of consumption and the exceptional
first place in the growth rate of the index of economic equality.
Exhibit 1: Ranking by Index of Economic Well-being and its Components, Canada and theProvinces
Panel A: Levels
Levels in 2019
Index of
Economic
Security
BritishColumbia

Rank

Index of Economic
Well-being

Index ofConsumption

Index of WealthIndex of Economic
Equality

1

British Columbia

Alberta

Newfoundlandand Labrador

Alberta2

Newfoundland andLabrador

Ontario

British Columbia

New Brunswick

Alberta3

Alberta

British Columbia

OntarioPrince Edward
IslandCanada4

Ontario

Nova Scotia

QuebecBritish Columbia

Quebec5

CanadaCanadaManitoba

QuebecSaskatchewan

6

QuebecManitoba

CanadaCanadaManitoba

7

Manitoba

Newfoundland andLabrador

Saskatchewan

Newfoundland andLabrador

Ontario8

Prince Edward
IslandSaskatchewan

Prince Edward
Island k

Ontario9

New Brunswick

New Brunswick

New Brunswick

Nova Scotia

10

Saskatchewan

QuebecAlberta

Manitoba

New Brunswick

11

Nova Scotia

Prince Edward
IslandNova Scotia

Saskatchewan

Nova Scotia

11

Newfoundlandand Labrador
Prince Edward
IslandPanel B: Growth Rates
Growth Rates, 1981-2019
Rank
1
2
3

Index of
Economic
Well-being
Newfoundlandand Labrador
Prince Edward
IslandNew
BrunswickIndex ofConsumption

Index of
WealthNewfoundlandand Labrador

Newfoundlandand Labrador
Prince Edward
IslandNew Brunswick

Index of Economic
Equality

Index of Economic Security

New Brunswick

Newfoundland and Labrador

Prince Edward Island

Prince Edward Island

QuebecQuebecNewfoundland andLabrador

British Columbia

4

QuebecPrince Edward
IslandOntario

Saskatchewan

Quebec5

BritishColumbia

Manitoba

BritishColumbia

Alberta

New Brunswick

6

Manitoba

Ontario

Manitoba

Nova Scotia

Canada7

CanadaCanadaCanadaQuebecManitoba

8

Nova Scotia

Nova Scotia

New Brunswick

Manitoba

Alberta

9

Ontario

BritishColumbia

Nova Scotia

CanadaSaskatchewan

10

Saskatchewan

Saskatchewan

Saskatchewan

British Columbia

Ontario11

Alberta

Alberta

Alberta

Ontario

Nova Scotia

12

The Index of Economic Well-being for
New Brunswick, 1981-2019
I.

The Index of Economic Well-being: Motivation andFramework

The literature on social indicators commonly, and correctly, asserts that there is more to‘well-being’ than material prosperity. The IEWB agrees and argues, furthermore, that although
access to economic resources plays a key role in overall well-being, there is more to economic
well-being than money income. Although money income – specifically, real Gross Domestic
Product (GDP) per capita ⎯ is the statistic most commonly used to indicate economic progress,
it is an inadequate measure of economic well-being. Our calculation of the IEWB is intended toprovide a more accurate measure of trends in economic well-being by broadening the definitionof economic well-being.
The compilers of the national accounts have long protested that their attempt to measure
in GDP the aggregate money value of marketed economic output was never intended as a fullmeasure of economic well-being. Nevertheless, GDP is has often been used as such, despite thefact that GDP accounting omits important aspects of individuals’ command over resources (forexample, leisure time and longevity of life) and ignores the sustainability of aggregate
consumption and the inequality and insecurity which individuals experience. In this paper, ourcalculation of the IEWB demonstrates that an alternative measure of “access to economic
resources” is possible, plausible, and capable of making a difference.
However, we emphasize that in focusing on purely economic aspects of well-being, we
do not intend to downplay the importance of non-economic dimensions of life for “well-being,”
more broadly conceived. On the contrary, we think that some non-economic dimensions of life
are too important to be combined with economic variables in an over-all index. We see, forexample, political liberties such as freedom of speech and assembly as crucial for a broader
conception of well-being. However, including non-economic issues in an aggregate well-being
index along with economic variables would build in the implicit trade-off assumption that a little
more income can always offset a little less in non-economic goods – and we reject thatperspective. We hope instead to provide a better measure of “access to resources needed for adecent standard of living.” To this end, we place particular emphasis on sustainability and thesensitivity of measures of aggregate “command over resources” to the omission or inclusion of
measures of income distribution and economic security.

13

In our view, indices of societal well-being are calculated in the hope that they can help
guide social decision-making. No individual needs any indices of societal well-being to evaluate
the impact of a public policy decision on their own personal well-being. However, civil servantsand politicians are called upon on a daily basis to answer questions such as “Would public policy
X make Canada better off?” Less frequently, voters also have to think about the same issues. Aslong as some individuals care, some of the time, about societal well-being as well as caring about
their own personal well-being, indices of societal well-being can be useful guides for decisionmaking.
In developing the Index of Economic Well-Being, based on four dimensions of economic
well-being (consumption, wealth accumulation, economic equality, and economic security), thisreport attempts to construct more accurate measures of effective consumption, economic security
and societal accumulation. However, unlike other indices, we do not argue that the weights
assigned to these dimensions of economic well-being are unique and that “Canada’s economic
well-being” is a single, objective number. As individuals differ in their values, in our view it is
not possible to define an objective index of societal well-being independent of the preferences ofindividuals. Because societal well-being has multiple dimensions and because individuals differ
in their subjective valuation of each dimension’s relative importance, individuals differ in theirevaluations of social states. When well-informed groups are asked for their personal assessmentof the relative importance of each of these four dimensions of well-being, the central tendency ofthe distribution of weights is reasonably close to our “base case” of equal weighting, but there isa large range of value preferences on each dimension.
Hence, one should think of each individual member of society as subjectively evaluating
the objective data available to them and then coming to a personal conclusion about society’s
well-being. Many public policies have outcomes that cannot be measured in directly comparable
units, as a practical matter, individuals often have to come to a summative decision in order todecide between policies – that is, have a way of “adding everything up” across conceptuallydissimilar domains. Since individuals, particularly in democracies, participate in decisions thatwill affect the collectivity, they face the problem of coming to a subjective evaluation of social
states. The motivation for constructing the IEWB is that individuals need organized, objective
data to effectively evaluate economic well-being.
Indices of social well-being can best help individuals to come to reasonable answers
about social choices if information is presented in a way that highlights the objective trends inmajor dimensions of well-being and thereby helps individuals to come to summative judgments,
without assuming that they all share exactly the same values. In our perspective, the purpose ofindex construction should be to assist individuals — e.g., as voters in elections and as
bureaucrats in policy making — to think systematically about public policy, regardless of theirpersonal value positions.
14

The logic of our identification of four components of well-being is that it recognizes both
trends in average outcomes and in the diversity of outcomes, both now and in the future, as
Exhibit 2 illustrates.
Exhibit 2: Conceptual Framework for the Index of Economic Well-being
Concept
Present
Future“Typical Citizen”/
Aggregate accumulation of
Average flow of current income“Representative Agent”
productive stocks
Distribution of potential
Heterogeneity in Experiences
consumption – income inequality Insecurity of future incomesand poverty

When an average income flow variable like GDP per capita or average personal income
is used as a summative index of well-being, the analyst is implicitly stopping in the first quadrantof Exhibit 2. They are assuming that the experience of a representative agent can summarize thewell-being of society and that the measured income flow optimally weighs consumption andsavings, so that one need not explicitly distinguish between present consumption flows and theaccumulation of asset stocks which will enable future consumption flows.
However, society is composed of diverse individuals living in an uncertain world who
typically “live in the present, anticipating the future.” Each individual’s estimate of societal
economic well-being depends on both current consumption and on the importance they assign tofuture consumption – i.e., the proportion of national income saved for the future. GDP is ameasure of the aggregate market income of a society. It does not reveal the savings rate, andthere is little reason to believe that the national savings rate is automatically optimal. Indeed, if
citizens have differing rates of time preference, any given savings rate will only be “optimal”
from some persons’ points of view. Hence, a better estimate of the well-being of society should
enable citizens to apply their differing values and allow analysts to distinguish between current
consumption and the accumulation of productive assets which determines the sustainability ofcurrent levels of consumption.
Some individuals may also be concerned about the degree to which all citizens will sharein prosperity – there is a long tradition in economics that “social welfare” depends on bothaverage incomes and the degree of inequality and poverty in the distribution of incomes. Because
the future is uncertain, and complete insurance is unobtainable (either privately or through thewelfare state), individuals also care about the degree to which the economic future is secure forthemselves and others.
If the objective of index construction is to assist public policy discussion, one must
recognize that discussion can easily be overwhelmed by complexity when too many categories
15

have to be considered simultaneously. We, therefore, do not adopt the strategy of simply
presenting a large battery of indicators. However, as reasonable people may disagree in therelative weight they would assign to each dimension (e.g. some will argue that inequality inincome distribution is highly important while others will argue the opposite), the IEWB is
explicit and open about the relative weights assigned to components of well-being, rather thanleaving them implicit and hidden. As well, for policy purposes it is not particularly useful toknow only that well-being has gone “up” or “down”, without also learning which aspect of wellbeing has improved or deteriorated. We specify explicit weights to the components of well-being
and test the sensitivity of aggregate trends to changes in those weights, in order to enable others
to assess whether, based on their own personal values about what is important in economic wellbeing, they would agree with an overall assessment of trends in the economy.2
This report’s basic hypothesis – that a society's economic well-being depends on total
consumption and accumulation and on the individual inequality and insecurity that surround the
distribution of resources – is consistent with a variety of theoretical perspectives. We, therefore,
do not present here a specific, formal model. In a series of papers (Osberg and Sharpe, 1998,
2002, and 2005) we have already described the details of the calculation of the four components
or dimensions of economic well-being:•

effective per capita consumption flows – which include consumption of marketed goods
and services, government services, and adjustment of effective per-capita consumption
flows for household production, changing household economies of scale, leisure,
regrettable expenditures, and life expectancy;•

net societal accumulation of stocks of productive resources – which consists of net
accumulation of physical capital plus accumulation of human capital plus changes in thevalue of natural resources stocks, net international investment position and R&D stocks,
minus an adjustment for costs associated with environmental degradation;•

income distribution – the intensity of poverty (incidence and depth) and the inequality ofincome;•economic security from the financial consequences of job loss and unemployment, illness
and family breakup, and from poverty in old age.
Each domain of economic well-being is itself an aggregation of many underlying
variables, on which the existing data can be of uncertain quality. By contrast, the System of
National Accounts has had many years of development effort by international agencies
2

Sensitivity analysis is omitted from this report on the IEWB for Newfoundland and Labrador. See the forthcoming
CSLS report on the IEWB for Canada, 1981 to 2018, for sensitivity analysis for Canada and the provinces.

16

(particularly the UN and the IMF) and has produced an accounting system for GDP that is
rigorously standardized across countries. However, using GDP per capita as a measure of“command over resources” would implicitly:(1) assume that the aggregate share of income devoted to accumulation (including net
changes in the public capital stock, human capital, research and development and thevalue of unpriced environmental assets) is always optimal, and(2) set the weight of income distribution and economic insecurity to zero, by ignoring
entirely their influence.
These assumptions do not seem justifiable, and they are not innocuous.
Due to data limitations, estimates of the Index of Economic Well-being computed for
different geographical regions may differ in the number of variables that can be included in thecalculations. Exhibit 3 illustrates the components that are used in our estimates of the Index of
Economic Well-being for Canada and the provinces, based on the four domains outlined above.
For illustrative purposes, we present below trends in the aggregate IEWB when each of the four
components (Current Average Consumption, Net Accumulation, Economic Security andInequality) receives equal weight. The data for each component are also available in an online
EXCEL file at www.csls.ca. It is straightforward to alter the weights assigned to each component
and to calculate what difference, if any, that makes for trends in the IEWB.

17

Exhibit 3: CSLS Index of Economic Well-being, Weighting Tree for Canada and the Provinces

18

II.

Overall Trends in the Index of Economic Well-being

The Index of Economic Well-being (IEWB) is comprised of four domains of economic
well-being: consumption flows, stocks of wealth, economic equality, and economic security.
This section examines the overall trends in the IEWB and its four domains in New Brunswick
from 1981 to 2019. The next four sections look at each domain in depth, analyzing developmentsin the components and subcomponents.3

A. Index of Economic Well-being
In 2019, the Index of Economic Well-being for New Brunswick scored 0.477, ranking
ninth in Canada (Chart 1). Moreover, New Brunswick was in third place compared to the otherAtlantic provinces.
Chart 1: Index of Economic Well-being by Province, 2019
British Columbia
Newfoundland and Labrador
Alberta
Ontario
CanadaQuebecManitoba
Prince Edward Island
New Brunswick
Saskatchewan
Nova Scotia

0.614
0.583
0.570
0.556
0.555
0.534
0.503
0.498
0.477
0.477
0.437
0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Index Level
Source: IEWB Database 2019, Table 9

The IEWB for New Brunswick increased 0.190 points from 0.288 in 1981 to 0.477 in
2019 (Chart 2). On the other hand, Canada’s IEWB increased only 0.113 points over the 19812019 period, from 0.442 in 1981 to 0.555 in 2019.
The province’s overall index grew more significantly than Canada’s over the period; the IEWB
for Canada increased 0.113 points from 0.442 in 1981 to 0.555 in 2019.
The IEWB for New Brunswick relative to Canada’s also experienced impressive growth,
increasing 16 percentage points from 69.1 per cent of Canada’s IEWB in 1981 to 85.9 per cent in2019 (Chart 2).

3

The complete excel database for Canada and the provinces is publicly available on the CSLS website. Refer to the
database posted with this report.

19

Chart 2: Index of Economic Well-being in New Brunswick, 1981-2019
Panel A: Absolute IEWB

0.600

Index level

0.500
0.400
0.300

0.200
0.100
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
New Brunswick

CanadaPanel B: Relative to Canada
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%

1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

0.0%

New Brunswick

CanadaSource: IEWB Database 2019, Table 9

The IEWB is a much broader and, many argue, more meaningful metric of economic
well-being than real GDP per capita. Consequently, it is useful to compare trends in the two
measures (Chart 3). Over the 1981-2019 period, GDP per capita in New Brunswick grew 1.24
times faster than the rate of the IEWB for the province (1.60 per cent versus 1.34 per cent peryear). One notes that the GDP per capita stands out more often than the IEWB whether it isrising or falling. Moreover, the magnitude of these variations differs greatly from one period toanother. For example, during the 2000-2008 period, the GDP per capita grew 3.4 times fasterthan the IEWB, while for the 2008-2019 period, it was the IEWB that showed a surprising
increase, growing 6.2 times faster than the GDP per capita. During the decrease in 2008-2014, it
20

was the GDP per capita that showed a greater decrease by being 2.3 times lower than the IEWB.
However, over the last four years of the analysis period, the IEWB registered the only time when
it had the largest increase (0.9 points higher than the GDP per capita). Finally, the only period
where a similar increase for both parameters was observed was between 1981-2000.

IEWB
Gdp per capita

0.109%

0.9624%

0.82%

2.08%

0.0497%0.500%

0.646%

1.000%

0.93%

0.440%

1.500%

1.57%

2.000%

1.342%

2.500%

2.21%

2.25%

Chart 3: Compound Annual Growth Rates of the Index of Economic Well-being and GDP per
Capita in New Brunswick, 1981-2019-0.2682%-0.500%-0.34%

0.000%

Source: IEWB Database 2019, Table 9

Exhibit 4 shows the rankings of Canada and the provinces by the levels and growth rates of theIndex of Economic Well-being and GDP per capita. One notes that the province ranked ninth inboth the IEWB level and GDP per capita. In terms of growth, New Brunswick made strong
progress, ranking third for the IEWB and third for GDP per capita for the 1981-2019 period.
Exhibit 4: Ranking by Index of Economic Well-being and Per-Capita GDP, Canada and theProvinces
Rank

Levels in 2019
Index of Economic Wellbeing

GDP per Capita

Growth Rate, 1981-2019
Index of Economic WellGDP per Capita
being
Newfoundland and
Newfoundland andLabradorLabrador

1

British Columbia

Alberta2

Newfoundland andLabrador

Saskatchewan

Prince Edward Island

Prince Edward Island

3

Alberta

Newfoundland andLabrador

New Brunswick

New Brunswick

4

Ontario

CanadaQuebecNova Scotia

5

CanadaOntario

British Columbia

Saskatchewan

6

QuebecBritish Columbia

Manitoba

Manitoba

7

Manitoba

Manitoba

CanadaQuebec21

8Prince Edward Island

QuebecNova Scotia

Canada9

New Brunswick

New Brunswick

Ontario

Ontario10

Saskatchewan

Nova Scotia

Saskatchewan

Alberta11

Nova Scotia

Prince Edward Island

Alberta

British Columbia

B. The Four Domains of the IEWB
During the 1981-2019 period, the IEWB in New Brunswick grew at a rate of 1.34 percent
per year (Chart 4). The consumption domain had the highest annual growth among the fourdomains of the IEWB (4.31 percent), followed by the economic equality (1.81 percent). The twoother domains fell in absolute terms at a rate of -0.24 percent for the wealth domain and at a rateof -0.27 percent for the economic security.
In other words, the improvement in the Index of Economic Well-being between 1981 and2019 was primarily driven by improvements in the consumption and wealth domain (Chart 4).
The consumption domain increased by 0.502 points, while the economic equality rose 0.322
points over the period. The domains of economic security and the wealth have slightly fell off.
The index of economic security was almost identical with the 1981 level, as for the wealthdomain, there is a minimal difference of 0.017.

0.9624%
0.109%

0.82%

2.08%

0.0497%0.500%

0.646%

1.000%

0.93%

0.440%

1.500%

1.57%

2.000%

1.342%

2.500%

2.21%

2.25%

Chart 4: Domains of the Index of Economic Well-being in New Brunswick, 1981 and 2019

IEWB
Gdp per capita

20142019-0.2682%
20082014-0.34%

20082019

20002008

20002018

19812000-0.500%19812019

0.000%

Source: IEWB Database 2019, Table 9

For the overall period, it can be noted that the consumption domain recorded the highest
growth (4.31 percent per year), followed by the domain of economic equality (1.81 percent peryear). In contrast, the other two domains (wealth and economic security) experienced small
declines (-0.24 percent and -0.27 percent respectively).
22

Looking at the periods 1981-2000 and 2000-2019, there was a large fall-off in the annual
growth of IEWB. In the second period, IEWB growth was almost a quarter of the IEWB growthin the first period (0.4 percent versus 2.25 percent). This can be explained by the fact that while
in 1981-2000 all components had positive growth, between the two periods, all domains
experienced slowdowns and some even fell in absolute terms in the second period. The
consumption domain had the largest drop (-5.26 percent points), followed by the domain of
economic equality (-1.62 percent points) and finally the domains of wealth and security, whichfell in absolute terms.
Subsequent periods, 2000-2008 and 2008-2019, showed similar annual growth rates for
the IEWB (0.62 percent versus 0.3 percent), although between periods there have been large
differences in the growth of all components. While in the first period, three of the four
components had negative growth with strong growth for consumption (3.83 percent), in thesecond period only the wealth domain had negative growth. Between 2000-2008 and 2008-2019,it was the consumption domain that had the largest reduction between periods (-3.6 points),
while the wealth domain had a less pronounced reduction in growth (1 points). In contrast, on
can note an increase between periods in the economic equality (0 versus 1.8) and the economic
security (-1.21 versus -0.5).
Finally, the IEWB growth (0.3 percent) recorded in 2008-2019 is inconsistent with the
IEWB growth observed in the two sub-periods 2008-2014 and 2014-2019, since for the first
period there is a negative growth (-0.3 percent), while for the second period there is a positive
growth (1 percent). The improvement in the second period was due on one hand because theconsumption domain experienced positive growth of 1.3 points compared to the other earlier
periods analysed and on the other hand because the domains of wealth and economic equality
had an impressive acceleration in growth of 4 points (-3.7 versus 0.3), 2.96 points (0.44 versus
3.4)
Table 1: Compound Annual Growth in the Domains of the Index of Economic Well-being in New
Brunswick, 1981-2019
1981-2019

1981-2000

2000-20192000-2008

2008-20192008-20142014-2019

Per Cent
Index of Economic
Well-being
Consumption Flows(Scaled)Stocks of Wealth(Scaled)Index of Economic
Equality
Index of Economic
Security

1.34

2.25

0.4

0.6

0.3

-0.3

1

6.96

1.7

3.8

0.2

0.4

0

-0.24

1.04

-1.5

-0.9

-1.9

-3.7

0.3

1.81

2.62

1

0

1.8

0.4

3.4

-0.27

0.28

-0.8

-1.2

-0.5

-0.5

-0.6

4.31

Source: IEWB Database 2019, Table 923

III. Trends in the Consumption Flows Domain
This section examines the components of consumption flows. The consumption domain
consists of three components: personal consumption expenditures, government expenditures on
goods and services, and unpaid work. The consumption domain is adjusted by three factors.
First, personal consumption expenditures are adjusted for family size to account for the
economies of scale that exist in private household consumption. Second, regrettable
expenditures—those that do not increase well-being—are subtracted from total consumption
flows. Lastly, the percent increase in life expectancy is applied to total consumption flows toadjust for the positive impact of increased life expectancy.
Chart 5 shows the levels of consumption components for New Brunswick in 2012
constant dollars per capita in 1981, 2000, 2008, 2014, and 2019. In every year, personal
consumption constituted the largest share of total consumption, followed by either government
expenditures or unpaid work.
Chart 5: Components of the Consumption Domain in New Brunswick, 1981, 2000, 2008, 2014 and2019

60,00050,00040,00030,00020,00010,0000-10,000

personnal
consumption

government
expenditure
1981

2000

unpaid work

2008

Source: IEWB Database 2019, Table 1

24

2014

regrettable
expenditure2019

tottalconsumption

A. Personal Consumption
In 2019, personal consumption (unadjusted) per capita in New Brunswick was $29,419 4,
which constituted 60 percent of total consumption. Among the provinces, New Brunswick
ranked eight in terms of personal consumption per capita (Chart 6). British Columbia had thehighest personal consumption per capita of the provinces at $34,657 per capita, exceeding New
Brunswick’s by 17.8 per cent.
Chart 6: Personal Consumption Per Capita by Province, 2019
British Columbia

34657

Alberta

34162

Saskatchewan

31038

Manitoba

28937

Ontario

32016

Quebec28666

New Brunswick

29419

Nova Scotia

30896

Prince Edward Island

28462

Newfoundland

31006

Canada

31612
0

5000

10000

15000

20000

25000

30000

Canada

Newfoundland

Prince Edward Island

Nova Scotia

New Brunswick

QuebecOntario

Manitoba

Saskatchewan

Alberta

British Columbia

35000

40000

Source: IEWB Database 2019, Table 1

New Brunswick experienced a growth in personal consumption per capita between 1981
and 2019 (Chart 7). During this period, personal consumption per capita in the province
increased by 2.1 per cent per year (Table 3, Panel C). In comparison, Canada’s personal
consumption grew less (1.7 per cent) annually over the period. Personal consumption grew
rapidly during the 2000-2008 period at 2.9 per cent per year. Despite its substantial growth overthe period, personal consumption in New Brunswick has never reached the national value.
However, by the end of the period, New Brunswick’s personal consumption per capita
represented 93.0 percent of Canada’s per capita personal consumption level (Table 3, Panel B).

4

All monetary values are expressed in 2012 constant dollars.

25

Chart 7: Personal Consumption Per Capita in New Brunswick and Canada, 1981-2019
35,00030,00025,00020,00015,00010,000
5,000
0

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

new brunswick

canadaSource: IEWB Database 2019, Table 1

B. Average Family Size
As noted previously, personal consumption must be adjusted for family size to reflecteconomies of scale in household consumption. When people live together in groups rather than
individually, they can achieve greater effective consumption. 5 To account for this issue, we use
the Luxembourg Income Study equivalence scale, which is the square root of family size.6
In 2019, the average family size in New Brunswick was 2.26 persons, which was slightly
lower than the national average of 2.35 persons (Chart 8). In contrast, in 1981, the province’s
average family size of 3.02 persons exceeded Canada’s at 2.72 persons. Between 1981 and 2019,the average family size in the New Brunswick had a negative growth of -0.76 percent per year
and Canada a negative growth of -0.38 per cent per. Consequently, New Brunswick’s averagefamily size in 1981 was 111.1 percent of Canada’s average family size and in 2019 it was 96.1
percent of the national average, reflecting in this way the fall (Table 3, Panel B).
The decline in family size in the province over the period was likely driven by a rise insingle persons living alone, falling birth rates, an exodus of working-age people with families,
and a rapidly aging population. A smaller average family size, however, dampens the ability ofhouseholds in the province to reap the aforementioned economies of scale in consumption and5

For example, they can cooperate in household production (e.g. one person can cook for the household) and share
fixed costs (e.g. the household shares one refrigerator rather than each person buying one).
6“Family” is categorized into two types: ‘economic families,’ which are groups of two or more persons related byblood, marriage, common-law, or adoption and living in the same dwelling, and ‘unattached individuals,’ which arepersons either living alone or sharing a dwelling with persons to whom they are unrelated. It should be noted thatunattached individuals living together (i.e. roommates) enjoy many benefits of economies of scale in household
consumption. However, as the data used in this report considers roommates as separate families, our adjustment forfamily size does not capture these benefits. Although our estimates are underestimated, the issue is minor.

26

decelerates the province's total adjusted personal consumption growth (in 1981-2000 the total
adjusted personal consumption growth was 2.25 per cent per year, but in 2014-2019 it was only
1.1 per cent per year).
Chart 8: Average Economic Family Size in New Brunswick and Canada, 1981-2019

Number of persons

3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

canadaNew Brunswick

Source: IEWB Database 2019, Appendix Table 2

C. Government Expenditures
The IEWB defines government expenditures per capita as spending by all levels ofgovernment on current goods and services and on fixed capital and inventories7, minus capitalconsumption allowances.8
In 2019, New Brunswick spent 13,760 per capita on government expenditures (Chart 9).
Government expenditures represented the second largest share of total consumption flows at 28
per cent. Among the provinces, New Brunswick ranked third in terms of government
expenditures per capita. The Atlantic Provinces, except for Prince Edward Island, had the highest
levels of per-capita government expenditures. Nova Scotia topped the rankings at $15,384 percapita, while Newfoundland and Labrador exceeded New Brunswick with $14278 per capita.

7

The inventory investment represents a small amount and could be subtracted.
Capital consumption allowances for government capital expenditure data are not available post-2009. The values
for 2010 through 2018 are extrapolated using the compound average annual growth rate from 2004 to 2009.
827

Chart 9: Government Expenditures per capita by Province, 2019

Nova Scotia

15,384

Newfoundland

14,278

New Brunswick

13,760Manitoba

12,874

Prince Edward Island

12,099

Alberta

11,902

Saskatchewan

11,779Ontario

11,743

Quebec11,250British Columbia

9,914

Canada11,773
0

2,000

4,000

6,000

8,000

10,00012,00014,00016,00018,0002012 S per capita
Source: IEWB Database 2019, Table 1

Government expenditures in New Brunswick have had a relatively constant ascent with
only a few variations between 1981 and 2019 (Chart 10). The province saw an annual increase of
1.07 per cent (Table 2, Panel B).
At the national level, government expenditures grew much slower; Canada’s government
expenditures increased at a modest rate of 0.6 per cent per year over the period. Consequently,
government expenditures in New Brunswick surpassed Canada’s in 1987, remaining above thenational value for the rest of the period. Explained another way, government expenditures in1981 were 97.7 percent of Canada's per capita government expenditures and in 2019 they were
116.8 percent (Table 3, Panel B).

28

Chart 10: Government Expenditures per Capita in New Brunswick and Canada, 1981-2019
16,0002012 S per capita

14,00012,00010,000

8,000
6,000
4,000
2,000
0

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

canadaNew Brunswick

Source: IEWB Database 2019, Table 1

Table 2 shows the absolute values of each sub-component of total government
expenditures, as well as the annual growth rates in several periods.
Looking at the Panel B related to the compound annual growth rates for the overall
period of 1981-2019, it can be noted that all the growths of the components that make up
government expenditure per capita are positive and that some growth rate are relatively similar,
such as the fixed capital and inventories growth (2.07 per cent per year) and the capitalconsumption allowance growth (2.49 per cent per year), while the growth of government
expenditures (1.07 per cent per year) is slightly lower than the two others.
From 1981-2000 to 2000-2019 sub-periods, the growth in total government expenditures
per capita has slowed down being caused by the drop in growth of government expenditures(1.53 percent versus 1.07 percent), but also the more pronounced drop in growth of fixed capitaland inventories (4.00 percent versus 0.18 percent).
During the periods 2000-2008 and 2008-2019, growth in total government expenditures
per capita fell (from 1.93 percent to 0.72 percent) although two of its components grew. Fixed
capital inventories grew by 3.51 percentage points (-1.84 percent to 1.67 percent) and the capitalconsumption allowance grew by 1.56 percentage points (2.70 percent to 4.26 percent). However,
it is the government expenditures that deteriorated by 1.26 percentage points (1.34 percent to0.08 percent).
Finally, for the last two sub-periods from 2008-2014 to 2014-2019, it can be noted thatfor the first period, the growth of the three components slowed-down in relation to the 20082019 period, with even negative growth (government expenditures having -0.61 percent).
Consequently, the total government expenditures per capita fell in absolute terms (-1.08 percent).
In 2014-2019, all the growths of the components increased compared to 2008-2014, which29

allowed for an increase in total government expenditures per capita of 2.57 percentage points (1.08 percent to 1.49 percent).
Table 2: Sub-Components of Government Expenditures per capita in New Brunswick, 1981-2019
Panel A: Absolute Values
Government
Expenditures
Fixed Capitaland Inventories
CapitalConsumption
Allowance

1981

2000

2008
Millions of 2012$

2014

2019

6,353

8,425

9,821

9,467

10,632

751

1,582

1,364

1,516

1,637

619

806

998

1,282

1,579

2012$ per Capita
Government
Expenditures per
capitaFixed Capital andInventories per
capitaCapitalConsumption
Allowance percapita8,993

11,22613,14912,473

13,760

1,063

2,108

1,826

1,997

2,461

876

1,074

1,336

1,689

1,966

12,782

13,760

2012$ per Capita
Total
Government
Expenditures
per capita

9,179

12,25913,640Panel B: Compound Annual Growth Rates
Government
Expenditures
Fixed Capital andInventories
Capital Consumption
Allowance
Total Government
Expenditures per
capita1981-2019

1981-2000

2000-20192000-2008
Per Cent

2008-20192008-20142014-2019

1.36%

1.50

1.23%

1.93

0.72%

-0.61

2.35%

2.07%

4.00

0.18%

-1.84

1.67%

1.78

1.55%

2.49%

1.40

3.60%

2.71

4.26%

4.26

4.26%

1.07%

1.53

0.61%

1.34

0.08%

-1.08

1.49%

Source: IEWB Database 2019, Appendix Table 630

D. Unpaid Work
Statistics Canada (1995) classifies unpaid work into five major categories:
1) Domestic work, which includes meal preparation, cleaning, clothing care, repairs andmaintenance, and other domestic work
2) Help and care, for children and adults
3) Management and shopping4) Transportation and travel5) Volunteer work
As data are not available on the value of unpaid work, we calculate the monetary value of
this component based on a number of assumptions. First, estimates of hours of unpaid work per
capita performed by working aged persons (persons 15 years of age or older) in the years 1981,
1986, and 1992 are taken from Statistics Canada (1995), and from Statistics Canada’s GeneralSocial Survey for the years 1998, 2005, 2010, and 2015. As the survey is only performed every
five years, we interpolate the hours worked in any given year between surveys by multiplying thehours of the previous year by the growth rate implied for its five-year period by the Statistics
Canada data. For years after the last survey, we extrapolate the hours worked using the growthrate of the previous five-year period. Second, to estimate the value of these hours, we use data
for the total value of unpaid work per year from Statistics Canada (1995) for the years 1981,
1986, and 1992, which uses a generalist replacement wage. To calculate the values after 1992,
we multiply the hours worked by the total labour compensation per hour for the total economy(which we refer to as ‘wages’) in constant dollars for that year.9
In 2019, the value of unpaid work per capita in New Brunswick was $10,839, whichconstituted 22.12 per cent of total consumption flows (Chart 11). Among the provinces, New
Brunswick had the third to last value of unpaid work. All four Atlantic provinces ranked below
the Canadian average. In 1981, New Brunswick’s per capita unpaid work represented 70.05
percent of Canada’s per capita unpaid work level and in 2019, 76.5 percent (Table 3, Panel B).

9

The values of hours after 1992 are extrapolated using the growth rate of real wages over the 1992-2018 period. The
wage in a given year is calculated by multiplying the wage of the previous year by the change in the index of labour
compensation, which are taken from Statistics Canada’s Labour Productivity Measures Survey and deflated by CPI.

31

Chart 11: Value of Unpaid Work per capita by Province, 2019
British Columbia

15,244

Alberta

14,714

Saskatchewan

10,737

Manitoba

12,781

Ontario

15,525

Quebec13,046

New Brunswick

10,839Nova Scotia

14,052

Prince Edward Island

11,283

Newfoundland

10,600

Canada14,162
0

2,000

4,000

6,000

8,000

10,00012,00014,00016,00018,0002012S per capita
Source: IEWB Database 2019, Table 1

The value of unpaid work per capita in New Brunswick increased between 1981 and2019 (Chart 12). Over the period, the value of unpaid work per capita in the province grew by
1.43 per cent per year, though it never reached Canada’s value of unpaid work except for 1986.
This growth was higher than Canada’s over the period. The national value of unpaid work per
capita increased at an annual rat of 1.19 over the period.
Despite the overall increase, the value of unpaid work in New Brunswick experienced adownward trend after peaking in 2010 at $13,151 per capita (Chart 12). During the 1981-2000
period, the value of unpaid work grew at a robust 3.09 per cent per year; however, during the
2000-2019 period, it fell by 0.20 per cent per year. This negative growth was most concentrated
towards the end of the period. Between 2014 and 2019, the value of unpaid work decreased by
2.5 per cent annually (Table 3, Panel C).

32

Chart 12: Value of Unpaid Work per Capita in New Brunswick and Canada, 1981-2019
20,00018,00016,00014,00012,00010,000
8,000
6,000
4,000
2,000
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
canadaNew Brunswick

Source: IEWB Database 2019, Table 1

Changes in the per-capita value of unpaid work reflect trends in three factors: thegeneralist replacement wage, the working-age population, and hours of unpaid work.
The unpaid wage rate and working-age population both increased between 1981 and 2019
in New Brunswick, contributing to the growth in the province’s value of unpaid work. The
unpaid wage rate increased by 1.55 percent per year from $7.28 in 1981 to $13.05 in 2019 in2012 dollars, though it remained well below the Canadian wage, apart from the low overrun in1986 (Chart 13). The working-age population increased between 1981-2019 by 0.57 per centannually (from 517,000 to 642,7000).
In terms of unpaid hours, there was a sharp increase from 1987 to 1998 and then aplateau until 2011, when a clear downward trend was observed. (Chart 14). The hours of unpaid
work grew at a slow rate of 0.134 percent per year (from 613 million hours in 1981 to 645
million hours in 2019).

33

Chart 13: Unpaid Work Wage Rate in New Brunswick and Canada, 1981-2019
20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00

1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

0.00

new brunswick

canadaSource: IEWB Database 2019, Appendix Table 5-1 & 5-5

900
800
700
600
500
400
300
200
100
0

1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

milions of hours

Chart 14: Hours of Unpaid Work in New Brunswick, 1981-2019

New brunswick

Source: IEWB Database 2019, Appendix Table 5-5

E. Regrettable Expenditures
Although most expenditures increase economic well-being, some — known as regrettable
expenditures — are spent to prevent or ameliorate undesirable outcomes. As people would bebetter off if such expenditures were not necessary, these expenditures represent a reduction inwell-being. This report defines regrettable expenditures as the cost of commuting (including
traveling and time costs), the cost of crime (such as security measures and repairing damaged
property), the cost of household pollution abatement (including expenses on devices to improve
air and water quality in the home), and the cost of automobile accidents (including repair costs

34and medical and legal expenses). As the sum of these costs does not contribute to or may actively
detract from well-being, regrettable expenditures are subtracted from total consumption flows.10
In 2019, regrettable expenditures in New Brunswick were $5029 per capita (Chart 15).11
Compared to the other provinces, New Brunswick fared modestly, ranking eight. The provinceswith the most regrettable expenditures, however, did not exceed Manitoba by a large margin.
British Columbia, which had the highest regrettable expenditures per capita, surpassed New
Brunswick by $895 or 17.7 per cent.
Chart 15: Regrettable Expenditures per Capita by Province, 2019
British Columbia

5,924

Alberta

5,840

Saskatchewan

5,306

Manitoba

4,947

Ontario

5,473

Quebec4,900

New Brunswick

5,029

Nova Scotia

5,281

Prince Edward Island

4,865

Newfoundland

5,300

Canada

5,404
0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2012$ Per capita
Source: IEWB Database 2019, Table 1

Regrettable expenditures in New Brunswick increased continuously during the 19812019 period (Chart 16). Regrettable expenditures rose 2.93 per cent annually. Although
regrettable expenditures in the province never exceeded the Canadian average during the period,
their growth rates were larger than Canada’s. Regrettable expenditures in Canada increased overthe period, at a rate of 2.47 per cent annually. By 2019, New Brunswick was close to reaching
Canada’s regrettable expenditures of $5,404 per capita. In other terms, in 1981, New
Brunswick’s regrettable expenditures per capita represented 78.4 percent of Canada’s per capita
regrettable expenditures and in 2019, 93.0 percent (Table 3, Panel B).

10

For further discussion on methodologies, see Wong (2020) for a report on the concept of regrettable expenditures.
Estimates of regrettable expenditures for the 1981-94 period are from Messinger (1997). Estimates after 1994 areextrapolations based on the assumption of constant growth rates. Furthermore, estimates for the provinces were
calculated by multiplying personal expenditures by Canada’s ratio of regrettable expenditures to personal
expenditures.
1135

Regrettable expenditures in the province grew more significantly after 2000. Between
1981 and 2000, the growth rate was 2.45 per cent per year, lower than the annual growth rate of
3.42 per cent between 2000- 2019. Interestingly, this higher growth was mostly concentrated in
the 2008-2014 sub-period, which saw annual growth of 3.77 per cent. Between 2014 and 2019,
growth slowed to 3.48 per cent per year, though it remained positive and substantial (Table 3,Panel C).
Chart 16: Regrettable Expenditures per capita in New Brunswick and Canada, 1981-2019
6,000

2012$ per capita

5,000
4,000
3,000
2,000
1,000
0
19811983198519871989199119931995199719992001200320052007200920112013201520172019
canadanew brunswick

Source: IEWB Database 2019, Table 1

F. Life Expectancy
Life expectancy is the final adjustment to consumption. Total consumption flows are
multiplied by an index of life expectancy, as an increase in longevity increases total consumption
flows.12
In 2019, life expectancy at birth in New Brunswick was 80.8 years, 6 years more than the1981 level of 75.0 years (Chart 17). Between 1981 and 2019, life expectancy barely advanced at
a rate of 0.19 per cent per year. Life expectancy in Canada rose 0.23 per cent annually from 1981
to 2019, reaching 82.4 years by the end of the period.
However, despite increasing since 1981, life expectancy in New Brunswick remainedslightly below the Canadian average throughout the period (Chart 17) and moreover startingfrom 2013, Canada’s life expectancy curve had a higher gap. In 1981, New Brunswick’s life
expectancy at birth represented 99.3 percent of Canada’s life expectancy at birth and in 2019,
98.0 percent (Table 3, Panel B).

Calver (2016) estimates that approximately 41 per cent of the improvement in Canada’s standards of living from2000 to 2011 can be attributed to changes in life expectancy. Therefore, we may be underestimating the impact of
the benefits of increased life expectancy on overall economic well-being.
1236

Chart 17: Life Expectancy at Birth in New Brunswick and Canada, 1981-2019
84
82

Age

80

78
76
74

72
70
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
canadanew brunswick

Source: IEWB Database 2019, Appendix Table 3

G. Total Consumption Flows
To calculate total per-capita consumption, we sum family size-adjusted personal
consumption, government expenditures on goods and services, and unpaid work, then subtract
regrettable expenditures. Finally, we adjust the total for the increase in life expectancy. Thisadjusted total consumption is scaled to generate the index of the consumption domain of theoverall Index of Economic Well-being.13
In 2019, total adjusted consumption flows in New Brunswick was 49,633 per capita,
while its index of the consumption domain was 0.629 (Chart 18). Among the provinces, New
Brunswick ranked third to last. The other Atlantic provinces similarly ranked below the
Canadian average. Alberta had the highest per-capita total consumption flows with $57,105 per
capita and a score of 0.799, which were significantly higher than New Brunswick’s.

13

To calculate the scores for the index of the consumption domain, we apply a linear scaling procedure to the total
adjusted consumption flows for each province. This scaling procedure does not affect the rankings of the provinces.

37

Chart 18: Total Consumption (Adjusted) per Capita by Province, 2019
Panel A: Per Capita
British Columbia

56,289

Alberta

57,105

Saskatchewan

49,722

Manitoba

51,884

Ontario

57,031

Quebec49,483

New Brunswick

49,633

Nova Scotia

55,027

Prince Edward Island

49,321

Newfoundland

50,327

Canada54,48544,00046,00048,00050,00052,00054,00056,00058,0002012 $ Per Capita

Panel B: Scaled (Index of the Consumption Domain)
British Columbia

0.780

Alberta

0.799

Saskatchewan

0.631

Manitoba

0.680

Ontario

0.797

Quebec0.626

New Brunswick

0.629

Nova Scotia

0.752

Prince Edward Island

0.622

Newfoundland

0.645

Canada

0.000

0.739

0.200

0.400

0.600

0.800

1.000

index level
Source: IEWB Database 2019, Table 1

Although New Brunswick had the lowest per-capita total consumption flows and neverreached Canada’s level during the period, the province saw a considerable improvement in the
consumption domain between 1981 and 2019 (Chart 19). Over the period, total consumption
flows per capita grew 1.56 per cent annually from its 1981 level of $27,472 per capita. This
improvement was more impressive than Canada’s, which experienced an increase of 1.32 percent per year. In 1981, New Brunswick’s per capita total consumption adjusted represented 83.2
percent of the national average and 91 percent in 2019 (Table 3, Panel B).

38

Chart 19: Total Consumption Flows per Capita in New Brunswick and Canada, 1981-2019
Panel A: Absolute Values
60,00050,00040,00030,00020,00010,00001981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
canadaNew Brunswick

Panel B: Scaled
0.900
0.800
0.700

2012$ per Capita

0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
canadaNew brunswick

Source: IEWB Database 2019, Table 1

Table 3 summarizes the overall findings for the consumption domain in New Brunswick.
Between 1981 and 2019, each component of the consumption domain increased in value.
Unadjusted personal consumption and regrettable expenditures are the components that stand out
the most, having more than doubled over the period under study. The only sub-component thathas declined is the family size adjustment, which shows a significant drop in value in 2019
compared to 1981. Taking into account that the index of life expectancy increases over the years,

39total consumption also increases (in 1981 total consumption adjusted was $27,472 and in 2019$49,633).
As regards the annual growth rates, it can be noted that most variables had growth rates
that fell over the period ending with lower growth rates at the end of the period compared to thebeginning of the period. The only variables that had higher growth at the end of the period thanat the beginning of the period were the index of square root of family size (-0.52 percent versus 0.25 percent), government expenditures (1.53 percent versus 0.61 percent) and regrettable
expenditures (2.45 percent versus 3.42).
For the period 1981-2019, all variables had positive growth, except for the index ofsquare root of family size which had negative growth throughout the following periods.
Between 1981-2000 and 2000-2019, almost all variables had large slow-downs, e.g. thelargest slow-down was for the total consumption (scaled) by 5.08 percent points (6.96 percent
versus 1.73 percent). The index of square root of family size which remains with negative
growth had a rise in its growth (-0.51 percent versus -0.26 percent) and the regrettable
expenditures had stronger growth in the second period (2.45 percent versus 3.41 percent).
In the periods 2000-2008 and 2008-2019, the same parameters experienced slowdowns
and total consumption (scaled) had again the strongest slowdown of 3.61 percent points (3.83
percent versus 0.22 percent).
For the last two periods, 2008-2014 and 2014-2019, the differences with the previous
periods are that government expenditures increased and even went from a negative to a positive
growth (-1.08 percent versus 1.49 percent), the regrettable expenditures also fell off by 0.29
percent points (3.77 percent versus 3.48 percent) and unpaid work deteriorated the most by 2.09
percent points (-0.41 percent to -2.50 percent).

40

Table 3: Summary of Consumption Components in New Brunswick, 1981-2019
Panel A: Per Capita
Personal Consumption(Unadjusted)
Family Size
Adjustment
Personal Consumption(Adjusted)
Government
Expenditures
Unpaid Work
Regrettable
Expenditures
Total Consumption(Unadjusted)
Life
Expectancy
Adjustment
Total Consumption(Adjusted)

1981

2000

2008
2012$ per Capita

2014

2019

13,131

20,14725,28527,83029,419708-882-1,927-2,345-2,568

13,83919,26523,35925,48529,419

9,179
6,314

12,25911,256

13,64012,612

12,782
12,302

13,76010,839-1,677-2,655-3,396-4,239-5,02927,65540,126

46,214

46,33049,633

-183

1,807

2,754

3,314

3,391

27472

41932

48969

49644

53024

Panel B: Relative to Canada
Personal
Consumption(Unadjusted)
Average FamilySize (persons)
Government
Expenditures
Unpaid Work
Regrettable
Expenditures
Life Expectancy(years)
Total
Consumption(Adjusted)

1981

2000

2008
Per Cent of Canada’s

2014

2019

78.4

89.4

91.4

93.7

93.06

111.1

101.0

97.0

96.8

96.1

97.7

117.0

112.3

109.0

116.8

70.1

76.7

76.5

75.7

76.5

78.4

89.4

91.4

93.7

93.0

99.3

99.6

99.0

98.9

98.0

83.2

91.6

90.0

89.7

91.09

41

Panel C: Compound Annual Growth Rates
1981-2019

1981-2000

2000-20192000-2008

2008-20192008-20142014-2019

Per Cent
Total
Consumption(Adjusted)
Total
Consumption(Scaled)Index of Life
Expectancy
Personal
Consumption(Unadjusted)
Index of Square
Root of Family
SizeGovernment
Expenditures
Unpaid Work
Regrettable
Expenditures

1.56

2.25

0.89

1.96

0.12

0.23

0

4.30

6.96

1.73

3.83

0.22

0.41

-0.01

0.20

0.27

0.12

0.17

0.09

0.19

-0.03

2.15

2.28

2.01

2.88

1.39

1.61

1.12

-0.38

-0.52

-0.25

-0.37

-0.16

-0.25

-0.05

1.07

1.53

0.61

1.34

0.08

-1.08

1.49

1.43

3.09

-0.2

1.43

-1.37

-0.41

-2.5

2.93

2.45

3.42

3.13

3.63

3.77

3.48

Source: IEWB Database 2019, Table 1

IV. Trends in the Stocks of Wealth Domain
Society’s stocks of wealth—both human-made and natural—determine the sustainabilityof its current level of consumption. The wealth domain could, therefore, also be called thesustainability domain. This section examines the five main components of the wealth domain:
physical capital stock, R&D stock, the stock of natural resources, net international position, andhuman capital. The sum of the five components is adjusted to account for the social costs ofenvironmental degradation by subtracting the estimated annual accumulated cost of greenhousegas emissions from the total stock of wealth.
Chart 20 shows the components of the wealth domain for New Brunswick in 1981, 2000,
2008, 2014, and 2019.

42

Chart 20: Components of the Stocks of Wealth Domain for New Brunswick in 1981, 2000, 2008,2014, and 2019200000180000160000140000120000100000
80000
60000
40000
20000
0
-20000Source: IEWB Database 2019, Table 2

43

2014

2019

Total Wealth2008

Greenhouse Gas Social Cost

2000

Stock of Human Capital

Net International Investment Position

Stock of Natural Resources

R&D Stock

1981

A. Physical Capital
The Index of Economic Well-being defines net capital stock as residential and nonresidential capital stock (both of them expressed in 2012$ constant dollar) based on geometricdepreciation.
In 2019, New Brunswick had a net capital stock of $85,366 per capita (Chart 21), which
represented 52.5 percent of its total wealth. Compared to the rest of Canada, the province ranked
second to last. In contrast, Newfoundland ranked second and Nova Scotia and Prince Edward
Island, the other Atlantic provinces, ranked along with New Brunswick at the bottom of the
rankings.
Chart 21: Net Capital Stock per Capita by Province, 2019
British Columbia

112,953

Alberta

225,058

Saskatchewan

151,520

Manitoba

102,585

Ontario

104,136

Quebec97,426

New Brunswick

85,366

Nova Scotia

92,599Prince Edward Island

73,076

Newfoundland

182,681

Canada120,6080

50,000100,000

150,000

200,000

250,000

2012$ per capita
Source: IEWB Database 2019, Table 2

The province’s net capital stock per capita grew between 1981-2019 at a rate of 1.48 percent annually, compared to Canada’s 1.43 per cent annually over the period (Chart 22). In 1981,
New Brunswick’s per capita net capital stock was 69.5 percent of the average national. In 2019 it
represented 70.7 percent of Canada’ per capita net capital stock (Table 7, Panel B). New
Brunswick’s growth in net capital stock per capita was stronger in the latter half of the period;
per-capita net capital stock grew 1.25 per cent annually in the 1981-2000 sub-period, but
increased even faster in the 2000-2019 sub-period at 1.72 per cent per year. It grew the fastestfrom 2000 to 2008 at 2.95 per cent annually (Table 7, Panel C).

44

Chart 22: Net Capital Stock per Capita in New Brunswick and Canada, 1981-2019
140,000

2012 $per capita

120,000
100,000
80,00060,00040,00020,00001981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
canadaNew brunswick

Source: IEWB Database 2019, Table 2

Net capital stock per capita in New Brunswick has consistently comprised a larger shareof non-residential capital than residential. In 2019, residential capital and non-residential capitalwere almost at the same level ($32,590 million versus $33,728 million respectively). Residential
capital had a growth rate of 2.90 percent per year from 1981-2019, while the growth of nonresidential capital was only 0.95 percent per year for the same period. The annual growth ofresidential capital was stronger than the growth of non-residential capital during all periods.
The highest growth for both types of capital was in the 2000-2008 subperiod (3.89
percent versus 2.17 percent). During the 2014-2019 subperiod, both types of capital had thelowest growth of all subperiods, the growth of non-residential capital even fell in absolute terms(-0.11 percent), which caused the lowest growth in total net capital stock (0.24 percent per year)of all subperiods combined.
Table 4: Sub-Components of Net Capital Stock per Capita in New Brunswick, 1981-2019
Panel: A: Absolute Values
1981

2000

2008

2014

2019

Millions of 2012$
Non-Residential

23,46927,531

32,69033,91033,728Residential

10,98018,83525,55130,09432,59084,32985,3662012$ per Capita
Net Capital
Stock (Total)

48,764

61,77977,97945

Panel B: Compound Annual Growth Rates per Capita
1981-2019

1981-2000

2000-20192000-2008

2008-20192008-20142014-2019

Per Cent
NonResidential
Residential
Net Capital
Stock (Total)

0.96

0.84

1.1

2.2

0.3

0.6

-0.1

2.9

2.88

2.9

3.9

2.2

2.8

1.6

1.48

1.25

1.7

3

0.8

1.3

0.2

Source: IEWB Database 2019, Appendix Table 7

B. R&D Capital
In 2019, R&D stock in New Brunswick was $946 per capita (Chart 23), which comprised thesmallest share of total wealth at 0.58 per cent. New Brunswick ranked last of the ten provinces.
With the exception of Newfoundland and Labrador, the other Atlantic provinces were also at thebottom of the rankings.
Also, in 1981, New Brunswick’s per capita R&D stock was 44.2 percent of Canada’s per
capita R&D stock and in 2019, it was 47.9 percent (Table 7, Panel B).
Chart 23: R&D Stock per Capita by Province, 2019
British Columbia

1,473

Alberta

1,706

Saskatchewan

1,284

Manitoba

1,349

Ontario

2,199

Quebec2,438

New Brunswick

946

Nova Scotia

1,369

Prince Edward Island

1,011

Newfoundland

1,620

Canada

1,972
0

500

1,000

1,500

2,000

2012 $ per capita

2,500

3,000

Source: IEWB Database 2019, Table 2

Between 1981 and 2019, New Brunswick’s R&D capital per capita grew 1.10 per centper year (Chart 24). In contrast, Canada’s R&D stocks per capita increased only by 0.88 per centannually. Similar to net capital stock, New Brunswick’s R&D stock grew the fastest in the 20002008 sub-period at 3.99 per cent annually. After 2008, the R&D stock started to have negative46

growth and continued until 2019, the worst being in the 2008-2014 subperiod with -1.28 percent
per year (Table 7, Panel C).
Chart 24: R&D Stock per Capita in New Brunswick and in Canada, 1981-20192012 $ per Capita

2,500
2,000
1,500
1,000
500
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 20192012$ per capita
canadaNew brunswick

Source: IEWB Database 2019, Table 2

C. Natural Resources
In 2019, the total value of natural resources in New Brunswick was $16,298 per capita(Chart 25), which accounted for 10.02 per cent of total wealth. New Brunswick had the fifth
highest level of natural resources among the provinces. The value of natural resources differedsignificantly across Canada. Prince Edward Island, for example, had the lowest value of natural
resources at $549 per capita, only 3 per cent of New Brunswick’s.
Chart 25: Natural Resources Stock per Capita by Province, 2019
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
QuebecNew Brunswick
Nova Scotia
Prince Edward Island
Newfoundland
Canada22,52824,01875,576
6,314
6,972
11,28816,2984,520

549
92,845
18,5320

10,00020,00030,00040,00050,00060,0002012 Per capita
Source: IEWB Database 2019, Table 2

47

70,00080,00090,000100,000

The per capita value of natural resources in New Brunswick fell over the period (-0.22
percent per year) but experienced much volatility (Chart 26). From 1981-2000, growth in natural
resources was strong, with a growth rate of 4.14 percent per year, peaking in 2000 at $38,747 per
capita. It was after 2000 that there were negative growth rates in most subperiods, the largest
being between 2008-2014 with a decrease of 8.84 percent per year. At the end of the period,
during the 2014-2019 subperiod, the growth of natural resources was the highest of all
subperiods, at 2.93 percent per year (Table 7, Panel C).
Canada also experienced relatively stable though negative growth between 1981 and2019, decreasing at an annual rate of 4.32 per cent. New Brunswick’s per capita natural
resources were 65.2 percent of Canada’ s per capita natural resources in 1981 and in 2019 they
were 87.94 of Canada (Table 7, Panel B).
Chart 26: Natural Resources Stock per Capita in New Brunswick and in Canada, 1981-2019
50,00040,00030,00020,00010,00001981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
canadaNex brunswick

Source: IEWB Database 2019, Table 2

We define the value of natural resources as the value of timber stocks, mineral resources,and energy resources.
The timber stocks per capita in constant dollars increased significantly between 19812019 (a growth rate of 4.49 percent per year) but fell considerably between 2000-2008 (-11.7
percent per year). After 2008, the growth rate became positive again and in 2014-2019 it was thehighest of all periods (6.7 percent per year) (Table 5, Panel B).
Mineral resources per capita fell by more than half between 1981-2019 ($2454per capita
in 1981 and 1222 per capita in 2019). However, between 2000-2008, they had the strongest
growth of 20.5 percent per year. After 2008 and up to 2019, mineral resources recorded strong
fells in absolute terms (the largest between 2008-2014 of -26.65 percent per year) (Table 5, PanelB).
The energy resources per capita have constantly fallen over the period and in 2019 they
had no value. Looking at the amounts in millions of current dollars, it can be noted that the48

demand for energy resources was stable until 2014, but after that there was no value in 2019.
This reduction was due to the decrease in energy prices (Table 5, Panel A).
These three sub-components of the natural resources play key roles in the province’s
economy. As a result, these sub-components were the main drivers behind the volatile trends inthe value of natural resources in New Brunswick over the period.
Table 5: Sub-Components of Total Natural Resources per Capita in New Brunswick, 1981-2019
Panel A: Absolute Values
1981

2000

2014

2019

20,116

2008
Millions of Current dollars
7,157

Timber Stocks

2,486

9,208

13,199MineralResources

2,223

1,997

8,799

1,225

1,222

EnergyResources

196

250

260

260

0

2012$ per Capita
Timber Stocks
MineralResources
EnergyResources
NaturalResources (Total)

8,930

34,855

10,58911,86013,199

7,986

3,459

13,018

1,578

1,222

703

433

384

334

0

17,61938,74723,991

13,772

16,298Panel B: Compound Annual Growth Rates per Capita (based on 2012 $)1981-2019

1981-2000

2000-20192000-2008

2008-20192008-20142014-2019

Per Cent
Timber Stocks
MineralResources
EnergyResources
NaturalResources(Total)

4.49

0.12

-2.2

-11.7

5.4

4.3

6.7

-1.82

-0.01

-0.02

0.2

-0.16

-0.23

-0.02

-100.00-2.52-100.00-1.50-100.00-2.28-100.00

-0.22

0.04

-0.04

-0.05

-0.03

-0.08

0.02

Source: IEWB Database 2019, Appendix Table 10, 11, 12, & 13

D. Net International Investment Position
In 2019, New Brunswick’s net international investment position was estimated to be
negative $6308 per capita (Chart 27)14 and it represented 77.2 percent of Canada’s per capita net
international investment (Table 7, Panel B). Among the provinces, New Brunswick ranked third.

14

No data are available on the provincial distribution of foreign assets and liabilities. We estimate provincial data byweighting the national value of the net international investment by provincial shares of national GDP, assuming thatsuch assets and liabilities directly relate to the amount of economic activity in a province.

49Newfoundland and Labrador was an outlier among the Atlantic region, as the three other Atlantic
provinces had the lowest international debt per capita in Canada.
Chart 27: Net International Investment per Capita in New Brunswick and Canada, 2019
British Columbia-7,794

Alberta-11,613

Saskatchewan-10,789

Manitoba-7,252

Ontario-8,013

Quebec-7,002-6,308

New Brunswick-6,239Nova Scotia-6,169Prince Edward Island
Newfoundland-9,506

Canada-8,165-14,000-12,000-10,000-8,000-6,000-4,000-2,0000

2012$Per Capita
Source: IEWB Database 2019, Table 2

Between 1981 and 2019, New Brunswick improved its net international investment
position (Chart 28). By 2019, the province decreased its international indebtedness by 28.3 percent from its 1981 level of negative $8,807 per capita. This improvement was mostly
concentrated in the 2000-2019 sub-period. In particular, between 2008 and 2014, the province’s
net international investment position improved at a significant rate of 22.44 per cent per year
(Table 7, Panel C).

50

Chart 28: Net International Investment per Capita in New Brunswick and Canada, 1981-2019
0-2,000-4,000-6,000-8,000-10,000-12,000-14,000-16,000-18,000

New Brunswick

Source: IEWB Database 2019, Table 2

E. Human Capital
The Index of Economic Well-being defines human capital as the accumulated private andpublic expenditures on education.15 In 2019, the value of human capital in New Brunswick was$173,871per capita (Chart 29), which was even higher than the total wealth of this province percapita ($163,770). New Brunswick’s per capita human capital represented 98.3 percent of
Canada’s per capita human capital in 2019 (Table 7, Panel B).
Compared to the other provinces, New Brunswick had relatively low human capitalstock, ranking eight. The other Atlantic provinces, apart from Prince Edward Island, also ranked
low in Canada in terms of human capital stock per capita.

15

The value of human capital is based on estimates of the cost of education in 2009/2010 and enrolment numbers
from different years.

51

2019

2017

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

CanadaChart 29: Human Capital Stock per Capita by Province, 2019
British Columbia

183,032

Alberta

155,516

Saskatchewan

235,773

Manitoba

189,723

Ontario

188,498

Quebec

176,904

New Brunswick

173,871

Nova Scotia

142,725

Prince Edward Island

175,755

Newfoundland

158,580

Canada176,825050,000100,000

150,000

200,000

250,000

Source: IEWB Database 2019, Table 2

Human capital stock per capita in New Brunswick improved from 1981 to 2019,
increasing 1.12 per cent per year from its 1981 level of $113,806 per capita. The province’s
overall growth in human capital stock was almost the same as Canada’s, which grew 1.11 percent annually over the period. Human capital per capita in New Brunswick grew much faster inthe 1981-2000 sub-period at 1.43 per cent per year than the post-2000 sub-period at 0.81 per centper year (Table 7, Panel C).
Chart 30: Human Capital Stock per Capita in New Brunswick and Canada, 1981-2019
200,000
180,000
160,000
140,000
120,000
100,000
80,00060,00040,00020,000

1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

0

CanadaNew Brunswick

Source: IEWB Database 2019, Table 252

All increases in absolute numbers in human capital are due to the increase in spending forpost-secondary certificate/diploma and for university degree (Table 6).
Between 1981 and 2019, the growth rates of post-secondary and university education
increased at an annual rate of 4.12 per cent and 3.32 per cent, respectively. However, the growthin spending at the post-secondary level and in university degree were stronger between 19812000 period (7.01 percent per year for the post-secondary and 3.31 percent for the university
degree) than between 2000 and 2019 (1.3 percent per year for the secondary and 3.3 percent for
the university degree), which in turn led to slower growth in total human capital during thesecond period (0.81 percent versus 1.43 percent).
Although between 1981-2000 and 2000-2019, investment in post-secondary educationand investment in university education fell, the latter was higher in the second period relative topost-secondary education (3 percent versus 0.9 percent), even though in the first period it was the
opposite.
In contrast, the growth of primary and secondary education decreased in absolute terms
over the years, driving down the growth rate of total human capital.
Table 6: Sub-components of Human Capital per Capita in New Brunswick, 1981-2019
Panel A: Absolute Values

0-8 Years
Some Secondary
Education
Graduated fromHigh SchoolSome PostSecondary
Post-Secondary
Certificate/Diploma
University Degree
Human Capital(Total)Human Capital(Total)

1981

2000

2014

2019

9.85

2008
Billions of 2012$
7.12

16.88

5.25

4.88

34.69

15.74

13.08

11.93

11.10

N/A

19.89

20.48

23.49

24.55

6.75

8.45

8.88

7.14

6.84

9.65

34.96

40.55

43.59

44.69

12.43

23.08

31.35

35.93

42.99

80.40

111.96121.462012$ per Capita

127.33135.075

113,806

149,175

162,628

167,768173871.490

53

Panel B: Compound Annual Growth Rates

0-8 Years
Some Secondary
Education
Graduated fromHigh SchoolSome PostSecondary
Post-Secondary
Certificate/Diploma
University Degree
Human Capital(Total)1981-2019

1981-2000

2000-2019

-3.21

-3

-3.6

-2.95

-0.04

N/A

2000-2008

2008-20192008-20142014-2019

Per Cent
-3.9

-3.5

-4.8

-1.8

-1.8

-2.3

-1.5

-1.4

-1.6

N/A

1.1

0.4

1.7

2.5

0.7

0.04

1.19

-1.1

0.6

-2.3

-3.6

-0.8

4.12
3.32

7.01
3.31

1.3
3.3

1.9
3.8

0.9
3.0

1.3
2.4

0.4
3.6

1.12

1.43

0.8

1.1

0.6

0.6

0.6

0.6

0.6

0.6

2012$ perCapitaHuman Capital(Total)

1.12

1.43

0.8

1.1

Source: IEWB Database 2019, Appendix Table 15

F. Social Cost of Environmental Degradation
Environmental degradation negatively affects the sustainability of stocks of wealth.
Although placing a value on environment is controversial,16 the Index of Economic Well-being
includes estimates of the social costs of greenhouse gases (GHG) to highlight the importance ofthe environment to economic well-being. To adjust for environmental degradation, we subtractthe estimated social costs of GHG emissions from total wealth. The social cost of emissions ineach year is derived by multiplying the amount of greenhouse gas emissions by their social
cost.17 As we assume that the costs of environmental degradation are not dissipated each year,
we sum the social costs of the previous years to estimate the total accumulated social costs of agiven year.
In 2019, the total cumulative social cost of GHG emissions since 1981 was $107546 percapita in New Brunswick (Chart 31), which represented 123.8 percent of Canada’s total
cumulative social cost of GHG emissions (Table 7, Panel B). Among the provinces, New
Brunswick ranking third, exceeding the national level. In the Atlantic region, Newfoundland andLabrador had the lowest total social cost of greenhouse gases, but every Atlantic province hadhigher social costs than the Canadian average.

16

See Sharpe et al. (2008) for a brief discussion of the methodological challenges on the estimation of marginal
social costs of GHG emissions.
17
The social cost is assumed to be $125 CAD per ton in 2012 dollars.

54

Chart 31: Total Social Cost of Greenhouse Gas Emissions per Capita by Province, 2019
British Columbia

54,926

Alberta

241,484

Saskatchewan

252,172

Manitoba

69,031

Ontario

59,887

Quebec47,586

New Brunswick

107,546

Nova Scotia

98,810Prince Edward Island

60,181

Newfoundland

89,627

Canada86,824050,000100,000

150,000

200,000

250,000

300,000

2012$ Per Capita
Source: IEWB Database 2019, Table 2

Chart 32: Cumulated Gas Emissions per Capita for Canada and the Provinces in 2019, from 19812019
Prince Edward Island

3,830
1,980
1,886

Alberta
855
775
693
680
542
475
432
375

Nova Scotia
CanadaOntario
Quebec

0

500

1,000

1,500

2,000

2,500

Tonnes per Capita
Source: IEWB database 2019, Appendix Table 9 & Appendix Tables 5-1 to 5-1

55

3,000

3,500

4,000

4,500

Chart 33: Emissions per Capita for Canada and the Provinces, 2019
Panel A: Total Emissions
British Columbia

8,250

Alberta

34,125

Saskatchewan

9,500

Manitoba

2,750

Ontario

20,625

Quebec10,375

New Brunswick

1,625

Nova Scotia

2,125

Prince Edward Island

213

Newfoundland

1,375

Canada

730
0

5,000

10,00015,00020,00025,00030,00035,00040,000

millions of tonnes

Panel B: Emissions per Capita
Prince Edward Island
Saskatchewan
Alberta
Newfoundland and Labrador
New Brunswick
CanadaManitoba
Nova Scotia
British Columbia
Ontario
Quebec

96.19
67.93
61.35
21.58
19.47
19.02
15.43
15.42
11.86
11.02
9.12
0.00

20.00

40.00

60.00

80.00

100.00Tonnes per Capita
Source: IEWB database 2019, Appendix Table 9 & Appendix Tables 5-1 to 5-11

Between 1981 and 2019, New Brunswick’s accumulated social cost of GHG emissions
increased 17.27 per cent annually (Chart 34 and Table 7, Panel C). New Brunswick exceeded
Canada’s per-capita accumulated social cost starting in 1989 and remained above until 2019. The
province’s marginal social cost per year between 1981-2019 had a negative growth of -2.05 percent annually from $2,691 per capita in 1981 to $1193 per capita in 2019. The marginal social
cost of GHG per year per capita in the province had a positive growth in the 1981-2000 subperiod at 1.6 per cent per year and a negative growth between 2000-2019 sub-period at -5.5 percent per year. In particular, between 2008 and 2014, the annual marginal social cost of GHG per
capita decreased at an annual rate of 4.1 per cent. (Table 7, Panel C).

56

Chart 34: Social Cost of Greenhouse Gas Emissions per Capita in New Brunswick and Canada,
1981-2019
Panel A: Accumulated Social Cost
120,000

2012$ per capita

100,000
80,00060,00040,00020,0000

canadaNew Brunswick

Panel B: Marginal Social Cost per year per Capita
4,500
4,000

2012$ per Capita

3,500
3,000
2,500
2,000
1,500
1,000
500
0
1981198319851987198919911993199519971999200120032005200720092011201320152017
New Brunswick

CanadaSource: IEWB Database 2019, Appendix Table 2 & 957

G. Total Wealth Stocks
To estimate the total stock of wealth, we sum the five components and adjust for thesocial cost of greenhouse gases. Total wealth is then scaled to generate the index of the stock of
wealth domain of the overall Index of Economic Well-being.
In 2019, New Brunswick totaled $162,627 per capita in wealth stocks (Chart 35).
Chart 35: Total Wealth per Capita by Province, 2019
Panel A: Per Capita
British Columbia

257,267

Alberta

153,199

Saskatchewan

201,191

Manitoba

223,687

Ontario

233,904

Quebec

233,469

New Brunswick

162,627

Nova Scotia

136,164Prince Edward Island

184,040

Newfoundland

336,593

Canada222,9490

50,000100,000

150,000

200,000

250,000

300,000

350,000

400,000

2012$ Per Capita

Panel B: Scaled (Index of the Stock of Wealth Domain)
British Columbia

0.418

Alberta

0.157

Saskatchewan

0.277

Manitoba

0.334

Ontario

0.359

Quebec0.358

New Brunswick

0.181

Nova Scotia

0.115

Prince Edward Island

0.235

Newfoundland

0.617

Canada
0.000

0.332
0.100

0.200

0.300

0.400

2012$ Per Capita
Source: IEWB Database 2019, Table 2

58

0.500

0.600

0.700

Total wealth stocks decreased by 0.11 per cent annually from its 1981 level of $169,316
per capita. In comparison, Canada’s total wealth grew 0.31 per cent per year between 1981-2019.
Consequently, New Brunswick’s per capita wealth was 85.1 percent of Canada’s per capita
wealth in 1981 compared to 72.9 percent in 2019 (Table 7, Panel B).
Chart 36: Total Wealth per Capita in New Brunswick and Canada, 1981-2019
Panel A: Absolute Values
250,000

2012$ Per Capita

200,000
150,000
100,000
50,00001981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Panel B: Scaled (Index of the Stock of Wealth Domain)
0.400

2012$ Per Capita

0.350
0.300
0.250
0.200
0.150
0.100
0.050

1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

0.000

CanadaNew Brunswick

Source: IEWB Database 2019, Table 2

Table 7 summarizes the findings for the components of the wealth domain in New
Brunswick from 1981 to 2019. The negative amounts in the first table (panel A) contributenegatively to the stock of wealth. Therefore, if these amounts improve, they contribute positively
to the wealth stock; if they deteriorate, they have a negative impact on the wealth stock.

59

Most of the components grew from 1981 to 2019, but there are others that slowed down.
Among the components that contributed to the increased in the stock of wealth are net capitalstock, net international investment position and human capital stock. Natural resources havedecreased by a small amount, but the total social cost of greenhouse gas has enormously
decreased; in 1981 it was negative $2691 per capita and in 2019 it was negative $107,546 percapita, which contributed to the total decrease in wealth.
Relative to Canada, components that had high percentages even managed to exceed theCanadian average at some points. In 2000 and 2008, the human capital stock and the greenhousegas social cost were above the Canadian level. However, total wealth was lower at the end of theperiod than at the beginning (72.1 percent versus 85.1 percent) because the social cost ofgreenhouse gas rose too high between these years.
The highest annual growth between 1981-2019 was the social cost of greenhouse gas(10.19 percent per year), which negatively affects total wealth growth. On the other hand, thelargest negative growth was the net international investment position (-0.87 percent per year),which contributes positively to total wealth.
Total wealth growth has been very low and has mainly experienced declines in absoluteterms throughout the years. Wealth growth was positive in the 1981-2000 sub-period (0.51
percent) and negative in the 2000-2019 sub-period (-0.7 percent), mainly due to the negative
growth in natural resources stock (-4.4 percent) and the relatively low growth rates of othervariables. The period when total wealth grew after the 2000s it was during the 2014-2019 period(0.1 percent), as a result of the considerable improvement in the net international investment
position (-19.3 percent).
Table 7: Summary of Stocks of Wealth Components per Capita in New Brunswick, 1981-2019
Panel A: Absolute Values
Net Capital StockR&D Stock
Natural Resources
Stock
Net International
Investment Position
Human Capital
Stock
Greenhouse Gas
Social Cost (Total)
AnnualSocial Cost(per millions
of tonnes)
Total Wealth

1981

2000

2014

2019

61,779757

2008
2012$ per Capita
77,9791,035

48,764624

84,329958

85,366946

17,61938,74723,991

13,772

16,298-8,807-7,942-2,691-7,740-6,308113,806

149,175

162,628

167,768

173,871-2,691-55,517-83,435-98,836-107,546

2691

3462

3131

2364

2434

169,316

186,999

179,507160,251

162,62760

Panel B: Relative to Canada (based on amounts per Capita)
Net Capital StockR&D Stock
Natural Resources
Stock
Net International
Investment Position
Human Capital
Stock
Greenhouse Gas
Social Cost (Total)
AnnualSocial Cost(per millions
of tonnes)
Total Wealth

1981

2000

69.6
44.2
65.2

70.8
44.0

2008
Per Cent of Canada’s
74.9
48.2
48.5

111.5
68.1

2014

2019

72.3
46.3

70.8
50.04848.1

90.287.9

77.0

77.577.3

98.8

98.3

125.2

123.9

93.6

102.4

70.2

72.9

81.6
76.7

97.9

100.9
101.2

95.5

122.2
110.7

95.5

115.0
116.2

85.1

88.8

73.2

Panel C: Compound Annual Growth Rates
1981-2019

1981-2000

2000-20192000-2008

2008-20192008-20142014-2019

Per Cent, per Capita
Net Capital Stock

1.48

1.25

1.7

3

0.8

1.3

0.2

R&D Stock

1.10

102

1.2

4

-0.8

-1.3

-.0.2

-0.22

4.14

-4.4

-5.5

-3.6

-8.7

2.9

-0.87

-0.54

-1.2

-12.7

8.1

19.3

-4

1.12

1.43

0.8

1.1

0.6

0.60

0.6

10.19

17.27

3.5

5.2

2.3

2.9

1.7

-0.27

1.33

-1.94

-1.25

-2.49

-4.57

0.73

-0.11

0.51

-0.7

-0.5

-0.9

-1.8

0.1

Natural Resources
Stock
Net International
Investment Position
Human Capital
Stock
Greenhouse Gas
Social Cost (Total)
AnnualSocial Cost(per millions
of tonnes)
Total Wealth

Source: IEWB Database 2019, Table 2
Note: For the compound annual growth rates of net international investment position, positive growth indicatesincreased indebtedness. Thus, negative growth indicates an improvement.

61

V.

Trends in the Economic Equality Domain

A fall in equality has a negative impact on economic well-being, and vice versa. Thissection examines the two components of economic equality: income inequality and poverty.
Chart 35 shows the components of the economic equality domain in New Brunswick
between 1981 and 2019. We measure income inequality by using the absolute values of Gini
coefficient18, constructed by Statistics Canada, and we measure poverty intensity by using the
product of the poverty rate, poverty gap ratio and the constant of 1.89. The poverty rate isdefined in relative terms, using Statistics Canada’s Low Income Measure (LIM), as the share of
Canadians who live below the poverty line (fifty per cent of median family income). The poverty
gap is the average difference between the poverty line and incomes of those in poverty.
Chart 32: Scaled Components of the Economic Equality Domain in New Brunswick, 1981, 2000,
2008, 2014 and 2019
0.700
0.600

Index level

0.500
0.400
0.300
0.200
0.100
0.000
Index of Gini Coefficient
1981

Index of Poverty Intensity
2000

2008

2014

Index of Equality

2019

Source: IEWB Database 2019, Table 3

In terms of the absolute values of Gini coefficients and poverty intensity, it can be notedthat between 1981-2019, New Brunswick had a stronger improvement in poverty intensity (2.3
points) than in Gini coefficients (0.75 points) (Chart 36).

18

The Gini coefficient for all families in Canada is based on after-tax income. While increases in most economic
indicators signify an improvement, an increase in the Gini coefficient indicates a decrease in equality. As such,when scaling the Gini coefficient to generate the index of income equality, we transformed it such that a higherscore indicates an increase in equality. Similarly, for the index of poverty, a higher score indicates an improvementin poverty intensity.

62Chart 36: Absolute values for Gini Coefficients and Poverty intensity for New Brunswick in 1981,
2000, 2008, 2014, 2019
0.350
0.300

0.290

0.291

0.279

0.277

0.270

Absolute values

0.250
0.200
0.150

0.115
0.085

0.081

0.100

0.084

0.070

0.050
0.000
1981

2000
Gini coefficients

2008
Poverty intensity

2014

2019

Source: IEWB database 2019, Appendix 17 & Appendix 18
The weighting of these two components is not equal. As we consider poverty to be moredetrimental to well-being than income inequality, we assign poverty intensity a weight of threequarters and income a weight of one quarter to determine the overall Index of Economic
Equality. Therefore, changes in poverty, as opposed to changes in the Gini coefficient, will moresignificantly drive the trends in economic equality.

A. Income Inequality
In 2019, New Brunswick’s absolute values of Gini coefficient was 0.274, ranking second
among the provinces (Chart 37). The province also ranked second (a score of 0.658) for theindex of income Inequality, which is the scaled Gini coefficient (Chart 38). One can note thatthe provinces have the same ranking for the absolute and for the scaled values of Gini
coefficient. First place was held by another Atlantic province, Prince Edward Island, while theother provinces in the region were situated near the middle of the rankings.

63

Chart 37: Absolute values of Gini Coefficient by Province, 2019
British Columbia

0.302

Alberta

0.293

Saskatchewan

0.292

Manitoba

0.29

Ontario

0.306

Quebec0.282

New Brunswick

0.274

Nova Scotia

0.279

Prince Edward Island

0.26

Newfoundland

0.299

Canada

0.299
0.23

0.24

0.25

0.26

0.27

0.28

0.29

0.3

0.31

absolute values of gini coefficient

Source: IEWB Database 2019, Appendix 17
Chart 38: Index of Income Inequality (scaled values of Gini Coefficient) by Province, 2019
British Columbia

0.399

Alberta

0.472

Saskatchewan

0.480

Manitoba

0.496

Ontario

0.367

Quebec0.561

New Brunswick

0.658

Nova Scotia

0.585

Prince Edward Island

0.739

Newfoundland

0.423

Canada

0.423

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

index level

Source: IEWB Database 2019, Table 3

The Gini coefficient for New Brunswick decreased from 0.290 in 1981 to 0.274 in 2019
(Chart 37). Over the 1980s, the Gini coefficient improved the most, as in 1989 it was 0.265.
However, according to the subperiods established for the analysis of this report the largest
decrease was between 2000-2008 (from 0.291 to 0.279), which is equivalent to greater equality
in household income.
64

Canada's Gini coefficient (Chart 37, Panel A), higher than New Brunswick's throughout
almost the entire period except the beginning of it, deteriorated from 0.285 to 0.299 between
1981-2019, with the largest growth between 1981-2000 of 0.56 percent per year. After 2000, theGini coefficient had relatively low rates of negative growth.
The scaled Gini coefficient (Chart 37, Panel B), which the higher its value, the higher theindex of equality, improved for New Brunswick between 1981-2019 (from 0.496 to 0.658).
Given that the Gini coefficient improved significantly between the 1980s, the result is that theincome inequality index grew the most during this same period (0.496 in 1981 and 0.698 in
1989-the highest index in the period). Considering the report’s sub-periods, between 2000-2008,
the scaled Gini coefficient had the greatest acceleration of 2.29 percent per year.
On the other hand, Canada's scaled Gini coefficient deteriorated from 0.536 to 0.423
between 1981-2019. The period with the strongest negative growth was between 1981-2000(-3.41 percent per year) and the strongest growth between 2014-2019 (5.4 percent per year).
Given that Canada's scaled Gini coefficient has deteriorated relative to New Brunswick's
between 1981-2019, it results that New Brunswick's scaled Gini coefficient percentage relative
to Canada's ended up exceeding the national average over the years. In 1981 it was 92.5 percent
of Canada's index of income equality and in 2019 it was 155.5 percent. The highest was in 2008
(193.8 percent of Canada's index of income equality), as New Brunswick's scaled Gini
coefficient had the highest growth between 2000-2008 (Table 8, Panel B and Panel C).
Chart 33: Index of Income Equality in New Brunswick and Canada, 1981-2019

Panel A: Gini Coefficient
0.35

Gini Coefficient

0.3
0.25
0.2
0.15
0.1
0.05
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

65Panel B: Index of Income Equality (Scaled Gini Coefficient)
0.800
0.700

Index Level

0.600
0.500
0.400
0.300
0.200
0.100

1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

0.000
CanadaNew Brunswick

Source: IEWB Database 2019, Appendix Table 17

B. Poverty Intensity
In 2019, the absolute value of poverty intensity for New Brunswick was 0.070 (Chart 38).
For both the absolute value and the index of poverty intensity, the province ranked fourth.
In 2019, New Brunswick’s index of poverty, based on scaled estimates of poverty
intensity, was 0.649(Chart 38). This progress can also be observed through comparison with
Canada. In 1981, New Brunswick's index of poverty intensity was 42.0 percent of Canada's
index of poverty, but by 2019 it was 101.4 percent (Table 8, Panel B).
Chart 38: Absolute values of Poverty Intensity by Province, 2019
British Columbia

0.062

Alberta

0.046

Saskatchewan

0.095

Manitoba

0.091

Ontario

0.071

Quebec0.074

New Brunswick

0.070

Nova Scotia

0.084

Prince Edward Island

0.074

Newfoundland

0.073

Canada
0.000

0.069
0.020

0.040

0.060

Absolute Values
Source: IEWB Database 2019, Table 3

66

0.080

0.100

Chart 39: Index of Poverty Intensity by Province, 2019
British Columbia

0.712

Alberta

0.841

Saskatchewan

0.439

Manitoba

0.472

Ontario

0.639

Quebec0.612

New Brunswick

0.649

Nova Scotia

0.528

Prince Edward Island

0.612

Newfoundland

0.622

Canada
0.000

0.651
0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

Index Level
Source: IEWB Database 2019, Appendix 18

Improvements in New Brunswick’s poverty rate and poverty gap fueled the overall
improvement in the index of poverty intensity between 1981 and 2019 (Chart 40). The poverty
rate decreased by 0.84 percent per year in 1981-2019, while the poverty gap also decreased by
0.49 percent per year between the same period. For the province, the poverty rate fell more in thefirst sub-period (-1.70 per cent per year) than in the second sub-period (0.01per cent per year).
For the poverty gap, the opposite occurred, with a greater decline in the second period (-0.8 percent per year) than in the first sub-period (-0.14 per cent per year). The largest decline in both thepoverty rate and the poverty gap was between 2014-2019 (-1.3 percent per year and -2.3 percent
per year, respectively). This decline was the largest among all periods, resulting in the largest
decline in poverty intensity (-3.6 per cent per year) and consequently the largest annual growth in
the index of poverty intensity (4 per cent per year). Although the poverty rate in the provinceremained higher than the national average by 2019, the two subcomponents of the index ofpoverty still improved the index of poverty intensity over the period.
The index of poverty intensity in New Brunswick has grown at an annual rate of 2.3 percent, from its 1981 level of 0.273 to its 2019 level of 0.649 (Table 8, Panel C). The index grew
more strongly pre-2000 (3.79 per cent per year) than post-2000 (0.83 per cent per year).
However, the strongest growth after 2000 was between 2014-2019 (4 percent per year).
It is towards the end of the period that the poverty intensity index for this province wassimilar to the national average. The index of poverty intensity in Canada has slightly increased
by 0.01 percent per year from its 1981 level of 0.650 to its 2019 level of 0.651. Between 1981-

67

2000 the index of poverty intensity had the strongest negative growth (-0.47 per cent per year),but from 2000-2019 the growth was 0.5 per cent per year.
Chart 40: Index of Poverty and its Subcomponents in New Brunswick and Canada, 1981-2019

Panel A: Poverty Rate25

Per cent

20
15
10
5
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Panel B: Poverty Gap ratio
3530

Per cent

25
20
15
10
5
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Panel C: Index of Poverty intensity
0.800
0.700

Per cent

0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Source: IEWB Database 2019, Appendix Table 1868

C. Index of Economic Equality
As discussed previously, the index of the economic equality domain is the weighted sumof the index of income inequality and the index of poverty intensity. The assigned weights are ¼
at the index of income inequality and ¾ at the index of poverty. In 2019, the index of economic
equality in New Brunswick was 0.638, ranking second (Chart 40).
Chart 34: Index of Economic Equality by Province, 2019
British Columbia

0.633

Alberta

0.749

Saskatchewan

0.449

Manitoba

0.478

Ontario

0.571

Quebec0.599

New Brunswick

0.651

Nova Scotia

0.542

Prince Edward Island

0.644

Newfoundland

0.572

Canada
0.000

0.594
0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

Index Level
Source: IEWB Database 2019, Table 3

New Brunswick’s score for the index of economic equality increased over the period(Chart 41). The province’s score rose at an annual rate of 1.81 percent from its 1981 score of
0.329 (Table 8, Panel C). The index of economic equality for Canada fell by -0.12 percent per
year from 1981-2019, but by 1996 the gap between the province's and Canada's index of
economic equality was smaller than previously. In 1981, New Brunswick’s index of economic
equality was 52.9 percent of Canada’s index of economic equality but in 2019 it was 109.5
percent (Table 8, Panel B).

69

Chart 35: Index of Economic Equality in New Brunswick and Canada, 1981-2019
0.800
0.700

Index Level

0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Source: IEWB Database 2019, Table 3

Table 8 summarizes the findings for the components of the economic equality domain in
New Brunswick from 1981 to 2019.
In summary, both the index of income inequality and the index of poverty improved overthe period under study, contributing to the growth of the index of economic equality. The factor
that contributed most to the growth of the index of economic equality in New Brunswick wasthat the index of poverty, which has a weight of three quarters in the calculation of the index ofequality, generally had higher growth rates than the index of income inequality over the period.
This led to a wider change of the index of poverty intensity between 1981-2019 (0.376 points),
compared to the change of the index of income inequality (0.162 points).
Compared to Canada, all indices nearly exceeded the national average in 2019. Between
1981 and 2019, the gap in the index of income inequality increased by 63.0 percentage points.
The most surprising percentage is in 2008 (193.8 percent of Canada's index of income
inequality). This is partly because the growth rate of the province's index of income inequality
between 2000-2008 was 2.29 percent per year, while for Canada the growth rate for the sameindex during the same period was 1.05 percent per year and partly because Canada between
1981-2000 had the largest fall of all periods in this index (-3.41 percent per year) and in the years
following its index did not exceed that of the province.

70

Table 8: Summary of Components of the Economic Equality Domain in New Brunswick, 1981-2019
Panel A: Index Level
Index of Income
Inequality
Index of Poverty
Index of Economic
Equality

1981

2000

2008
Index Level

2014

2019

0.496
0.273

0.488
0.554

0.585
0.520

0.601
0.534

0.658
0.649

0.329

0.537

0.537

0.551

0.651

Panel B: Relative to Canada

Index of Income
Inequality
Index of Poverty
Index of Economic
Equality

1981

2000

2008
Per Cent

2014

2019

92.5
42.0

175.8
93.2

193.8
88.2

184.4
89.6

155.4
99.7

52.9

104.4

103.6

104.2

109.6

Panel C: Compound Annual Growth Rates
1981-2019

1981-2000

2000-20192000-2008

2008-20192008-20142014-2019

Per Cent
Index of Income
Inequality
Index of Poverty
Index of
Economic
Equality

0.75
2.3

-0.09
3.79

1.6
0.8

2.3
-0.8

1.1
2

0.5
0.4

1.8
4

1.81

2.62

1

0

1.8

0.4

3.4

Source: IEWB Database 2019, Table 3

VI. Trends in Economic Security Domain
The economic security domain is the last and most complex domain of the Index of
Economic Well-being.19 Its methodology has evolved since the Index’s introduction in 1998.
The economic security domain has four components concerning the risks to economic wellbeing: risk imposed by unemployment, financial risk from illness, risk from single-parent
poverty, and risk of poverty in old age. These components have a different weight from one
variable to another and may have different values from one year to the next because thecalculations are based on the percentage of the population in each category. The category thathas the highest percentage is the risk of illness, because for each year a percentage of 100% is
assigned. Therefore, in the calculation of the index of economic security it is the risk of illness
that is weighted the most and has a greater impact on the index. The second highest percentage isthe risk imposed by unemployment. Finally, the two other risks were given almost the same19

See Heslop (2009) for a discussion of the role of economic security in an index of economic well-being and anassessment of the CSLS approach to the measurement of economic security.

71

weight in the calculation in 2019 (0.13 for the risk from single-parent poverty and 0.14 for therisk from poverty in old age). Over the years, the weight of the risk from single-parent poverty
has decreased by about half (0.24 in 1981, 0.13 in 2019), while the other has doubled (0.07 in
1981 and 0.13 in 2019).
Chart 42 compares the components of the economic security domain in New Brunswick
between 1981 and 2019.20

Index Level

Chart 36: Components of the Economic Security Domain in New Brunswick, 1981, 2000, 2008,2014, 2019
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
Weight for Security Weight for Security Weight for Security Weight for Security Overall Index offrom Risk Imposed from Risk Imposed from Risk Imposed from Risk Imposed Economic Security
by Unem-ployment
by Illness
by Single-Parent
by Poverty in Old
Poverty
Age

1981

2000

2008

2014

2019

Source: IEWB Database 2019, Table 4, 5, 6, 7 & 8

A. Risk from Unemployment
Three variables comprise the index of the risk imposed by unemployment: theunemployment rate, the proportion of the unemployed receiving EI benefits, and the proportionof earnings that are replaced by EI benefits. We multiply the proportion of the unemployedreceiving benefits and the proportion of earnings to obtain an index for financial protection fromunemployment. To generate the index of risk from unemployment, we sum the scaled
unemployment rate, which is assigned a weight of four-fifths, and scaled financial protection for
unemployment, which is assigned a weight of one-fifth.21 As a result, the unemployment rate is
the primary driver of changes in the index of risk from unemployment.

20

As linear scaling procedures are applied to all sub-components, an increase in any of the indexes translates to lessrisk, an improved outcome.
21
The unemployment rate receives a heavier weight, as it signifies the relative ease of obtaining employment.
Compared to financial protection from unemployment, the unemployment rate is considered a more important
indicator of economic security for most of the working population.

72

In 2019, the index of security from the risk imposed by unemployment in New
Brunswick scored 0.639, ranking ninth among the provinces (Chart 43). All other Atlantic
provinces had a lower index than New Brunswick. Nova Scotia's index was the closest to that of
New Brunswick.
Chart 37: Index of Security from the Risk Imposed by Unemployment by Province, 2019
British Columbia
QuebecCanadaOntario
Saskatchewan
Manitoba
New Brunswick
Nova Scotia
Alberta
Prince Edward Island
Newfoundland and Labrador

0.714
0.694
0.675
0.669
0.669
0.668
0.650
0.649
0.634
0.608
0.414
0.0

0.1

0.2

0.3

0.4
Index Level

0.5

0.6

0.7

Source: IEWB Database 2019, Table 4

The index of risk from unemployment in New Brunswick increased by 0.53 percent per
year in 1981-2019. The index of risk from unemployment grew slightly more in 2000-2019 (0.6
percent per year) than in 1981-2000 (0.45 percent per year) (Table 9, Panel C).
Canada also had growth in its index of risk from unemployment, but to a lesser extent
than New Brunswick (0.19 per cent per year). Canada’s growth in this index was also stronger
between 2000-2019 (0.3 per cent per year) than between 1981-2000 (0.09 per cent per year).
For New Brunswick, the growth in the index of risk from unemployment was due to two
factors; the decline in the unemployment rate (from 11.60 percent in 1981 to 8.18 percent in2019) and the decline in the scaled financial protection for unemployment (from 0.559 to 0.462
between 1981-2019). The financial protection for unemployment is the product of EI coveragerate and the earnings replacement rate. The EI coverage rate for the province had a fall of 0.79
percent per year between 1981-2019, but the earnings replacement rate has had a rather flat curve
like Canada's and a growth of 0.34 percent per year over the period. The province's EI coveragerate declined sharply in the first half of the 1990s, after which time the curve stabilized.
In the case of Canada, between 1981-2019 the unemployment rate had a fall (from 7.6
percent in 1981 to 5.73 percent in 2019) and the scaled financial protection for unemployment
had a fall (from 0.302 to 0.160 between 1981-2019).
Compared to Canada, the index of risk imposed by unemployment in New Brunswick
was 82.8 percent of Canada's index of risk from unemployment in 1981 and by 2019 it had risen
to 94.5 of the national average (Table 9, Panel B), consequently reflecting New Brunswick’s
faster growth.

73

0.8

Chart 38: Risk from Unemployment and its Subcomponents in New Brunswick and Canada, 19812019
Panel A: Unemployment Rate
16.00
14.00

Per Cent

12.00
10.00
8.00
6.00
4.00
2.00
0.00
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
New Brunswick

CanadaPanel B: EI Coverage Rate
160.00140.00Per Cent

120.00100.00
80.00
60.00
40.00
20.00
0.00
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
New Brunswick

74

CanadaPanel C: Earnings Replacement Rate
60.00

Per Cent

50.00
40.00
30.00
20.00
10.00
0.00
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
New Brunswick
CanadaIndex Level

Panel D: Scaled Financial Protection for Unemployment
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
New Brunswick

CanadaPanel E: Index of Risk from Unemployment
0.800
0.700

Index Level

0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

New Brunswick

Source: IEWB Database 2019, Table 4

75

CanadaTable 9: Summary of Components for the Risk Imposed by Unemployment for New

Brunswick, for 1981, 2000, 2008, 2014, 2019
1981

2000

2008
Percent

2014

2019

Unemployment rate

11.6

10.0

8.5

9.9

8.18

EI Coverage Rate

124.2

95.8

94.7

80.8

91.92

Earnings
Replacement Rate

38.3

42.7

44.0
Relative to
Canada(Percent)

44.2

43.54

152.6
174.4

147.1
201.4

139.3
206.1

143.5
210.2

142.7
235.1

99.2

105.3

108.0

107.2

103.8

Unemployment rate
EI Coverage Rate
Earnings
Replacement Rate

Index Level
Scaled Financial
Protection for
Unemployment
Overall Index of
Risk from
Unemployment

Scaled Financial
Protection for
Unemployment
Overall Index of
Risk from
Unemployment

0.559

0.473

0.483

0.407

0.462

0.522

0.569

0.630
Relative to
Canada(Percent)

0.559

0.639

185.1

240.7

255.1

266.6

289..1

82.8

88.7

94.4

89.0

94.5

Source: IEWB Database 2019, Table 4

B. Financial Risk from Illness
Canadian citizens have access to universal health care, which provides medicallynecessary procedures free of charge. As a result, they face significantly less risk than citizens incountries without universal coverage, such as the United States. However, Canadians still facesignificant private expenditures on health care, as many services, such as dental care,pharmaceuticals, and medically unnecessary procedures, are not covered. These expenditures,
which disproportionately affect low-income Canadians, are rapidly rising. We use scaled private
medical expenditures as a proxy for the risk imposed by illness.22
22

Private expenditures include all out-of- pocket expenditures non-reimbursed, made by individuals for thefollowing: health care goods and services; health insurance claims paid to individuals by commercial and not-forprofit insurance firms, as well as the costs of administering those claims; non-patient revenues received by healthcare institutions, such as donations and investment income; private spending on health- related capital constructionand equipment; and health research funded by private sources.

76

In 2019, the index of security from the risk imposed by illness in New Brunswick was
0.213, the second lowest score in Canada (Chart 45). The other Atlantic provinces also received
the lowest scores for risk from illness but with a relatively higher level of security from illness,
Newfoundland and Labrador was the outlier in the Atlantic region.

Chart 39: Index of Security from the Risk Imposed by Illness by Province, 2019
British Columbia

0.506

Alberta

0.403

Saskatchewan

0.370

Manitoba

0.398

Ontario

0.326

Quebec0.415

New Brunswick

0.213

Nova Scotia

0.158

Prince Edward Island

0.310

Newfoundland

0.458

Canada
0.000

0.421
0.100

0.200

0.300

0.400

0.500

0.600

Index Level
Source: IEWB Database 2019, Table 5

New Brunswick’s low score for risk from illness stemmed from increasing private
medical expenditures between 1981 and 2019 (Chart 46). Over the period, the share of private
medical expenditures increased from 2.26 percent in 1981 to 3.31 per cent of income in 2019,
which corresponds to an annual growth of 1.03 percent per year. As a result, New Brunswick’s
index of risk from illness decreased by 2.77 percent per year from 1981-2019 (Table 9, Panel C).
Canada’s private medical expenditures increased from 1.75 per cent in 1981 to 2.97 percent of income in 2019, which is equivalent to a growth of 1.43 percent per year. Therefore,
Canada’s index of risk from illness decreased by 1.61 percent per year.
In terms of percentages, New Brunswick’s index of risk from illness was 79.5 percent of
Canada’s index of risk from illness in 1981 and in 2019 it represented 50.6 percent of thenational average (Table 9, Panel B).
While the index of risk from illness in New Brunswick decreased over the period, thenegative growth was concentrated between 2000 and 2008. During this subperiod, the index
declined by 5.54 per cent per year (Table 9, Panel C), due to the highest increase in the
proportion of private expenditure on healthcare in personal disposable income (2.19 percent peryear).

77

Chart 40: Risk from Illness in New Brunswick and Canada, 1981-2019
Panel A: Private Non-Reimbursed Medical Expenditures as a Proportion of Personal Disposable
Income
4.00
3.50

Per Cent

3.00
2.50
2.00
1.50
1.00

0.50
0.00
CanadaNew Brunswick

Panel B: Index of Risk from Illness (Scaled Private Medical Expenditures)
0.900
0.800

Index Level

0.700
0.600
0.500
0.400
0.300
0.200
0.100

0.000

CanadaNew Brunswick

Source: IEWB Database 2019, Table 578

Table 10: Summary of Components for the Index of Risk imposed from Illness, for New Brunswick,for 1981, 2000, 2008, 2014, 2019

Private Non-reimbursed
Medical Expenditures asa Proportion of Personal
Disposable Income

1981

2000

2.3

2.8

2008
Percent

2014

2019

3.3

3.3

3.55

118.3

122.8

0.297

0.213

65.0

50.6

Relative to
Canada(Percent)
Private Non-reimbursed
Medical Expenditures asa Proportion of Personal
Disposable Income

128.9

105.6

115.4

Index Level
Index of Risk from Illness

0.620

0.446

0.283

Relative to
Canada(Percent)
Index of Risk from Illness

79.5

90.6

66.9

Source: IEWB Database 2019, Table 5

C. Risk from Single-Parent Poverty
The index of security from the risk imposed by single-parent poverty consists of threevariables: the divorce rate, the poverty rate for lone parent families, and the poverty gap for thesefamilies.23 The poverty rate is the proportion of lone-parent families whose total after-tax
incomes fall below fifty percent of the median equivalent income, and the poverty gap is theaverage difference between the poverty line and the incomes of those families. We multiply thethree variables to generate the index of the risk from single-parent poverty.
In 2019, New Brunswick scored 0.765 for the index of risk from single-parent poverty(Chart 47). The province enjoyed the sixth highest level of security from single-parent poverty in
Canada. This high score was explained by the province’s relatively low divorce rate of 0.60 per
cent (the third lowest in Canada) and poverty gap for persons living in female lone-parent
families of 27.8 per cent (also the third lowest in Canada) in 2019.

23

The divorce rate is included as divorce pushes many people, especially women, into poverty.

79

Chart 41: Index of Security from the Risk Imposed by Single-Parent Poverty by Province, 2019
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
QuebecNew Brunswick
Nova Scotia
Prince Edward Island
Newfoundland
Canada
0.000

0.768
0.785
0.781
0.485
0.558
0.790
0.765
0.818
0.755
0.748
0.692
0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

Index Level
Source:IEWB Database 2019, Table 6

All the subcomponents of the index of security from the risk imposed by single-parent
poverty have declined for New Brunswick and for Canada over the period thereby increasing thisindex.
For instance, for New Brunswick the index increased by 1.97 percent per year from 19812019. The index had a stronger annual growth between 2000-2019 (2.1 percent per year) thanbetween 1981-2000 (1.81 percent per year). The largest post-2000 growth was between 20142019 (2.2 percent per year). As for Canada, its index’s growth rate between 1981-2019 was 1.28
per cent per year, lower than that of New Brunswick. Moreover, the opposite occurred in termsof growth between the two sub periods, as the strongest growth was between 1981-2000 (1.60
percent per year) compared to the 2000-2019 period (1 percent per year). However, it is during
this second period that the index of security from the risk imposed by single parent poverty had
the highest growth (3.50 percent per year between 2014-2019).
In percentage terms, as a result of the higher growth rate of the index of security from therisk caused by single-parent poverty in New Brunswick than in Canada, the index was 85.1
percent of Canada’s same index in 1981 but it was 110.5 percent by 2019, exceeding the national
average.
As stated above, the subcomponents of the risk from single-parent poverty declined overthe period for both New Brunswick and Canada. One can note that the largest negative growthfor both the province and the country was in 2014-2019. For New Brunswick, the fall of thedivorce rate, the poverty rate and the poverty gap for persons in lone-parent families were -3.71
percent, -8.7 percent and -2.2 percent per year, respectively.

80

Chart 42: Risk from Single-Parent Poverty and its Subcomponents in New Brunswick and Canada,
1981-2019
Panel A: Divorce Rate
1.8
1.6
1.4

Per Cent

1.2
1.0
0.8
0.6
0.4
0.2
0.0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Panel B: Poverty Rate for Persons in Lone-Parent Families
70.0
60.0

Per Cent

50.0
40.0
30.0
20.0
10.0
0.0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Panel C: Lone-Parent Families Average Poverty Gap Ratio
45.0
40.0

Per Cent

35.0
30.0
25.0
20.0
15.0
10.0

5.0
0.0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick81Index Level

Panel D: Index of Risk from Single-Parent Poverty
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Source: IEWB Database 2019, Table 6

Table 11: Summary of Components of the Index of Risk from Single Parent Poverty for New
Brunswick, for 1981, 2000, 2008, 2014, 2019

Divorce Rate
Poverty Rate for
Persons in LoneParent Families
Lone-Parent
Families Average
Poverty Gap
Ratio

1981

2000

2008
Percent

2014

2019

0.8

1.1

0.9

0.7

0.6

60.3

47.9

45.3

42.0

34.8

40.1

27.9

27.2

28.8

27.8

Relative to
Canada(Percent)
Divorce Rate
Poverty Rate for
Persons in LoneParent Families
Lone-Parent
Families Average
Poverty Gap
Ratio

71.8

94.1

76.8

65.2

56.9

148.9

132.0

134.4

111.1

119.6

105.8

96.2

90.1

95.7

99.6

0.686

0.765

117.5

110.4

Index Level
Index of Risk
from SingleParent Poverty

0.364

0.512

0.627

Relative to
Canada(Percent)
Index of Risk
from SingleParent Poverty

85.1

88.6

103.6

Source: IEWB Database 2019, Table 682

D. Risk from Poverty in Old AgeThis final component of the economic security domain is the risk of poverty in old age.
This component uses the poverty rate and poverty gap of persons 65 and over to calculate
poverty intensity for the elderly24. We scale and multiply these variables by a constant of 1.89 toobtain the index of security from risk imposed by poverty in old age.
In 2019, New Brunswick’s index of risk from poverty in old age scored 0.502, ranking
seventh of the provinces (Chart 49). In the Atlantic region, the province ranked first and slightly
exceeded Newfoundland and Labrador. Nova Scotia and Prince Edward Island, however, had thelowest levels of security from poverty in old age.
Chart 43: Index of Security from the Risk Imposed by Poverty in Old Age by Province, 2019
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
QuebecNew Brunswick
Nova Scotia
Prince Edward Island
Newfoundland
Canada
0.000

0.675
0.808
0.541
0.607
0.629
0.407
0.502
0.461
0.499
0.418

0.580
0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

Index Level
Source: IEWB Database 2019, Table 7

Although New Brunswick had an average ranking among the provinces, its curve in theindex of risk from old-age poverty exceeded that of Canada’s (Chart 50). From 1981 to 2019, theprovince’s index improved by 3.24 per cent annually (Table 9, Panel C) from 0.150 in 1981 to
0.502 in 2019. At the national level, the index grew 1.39 per cent annually over the period.
In 1981, New Brunswick’s risk from poverty in old age represented 43.6 percent of
Canada’s risk from poverty in old age and in 2019 it was 86.5 percent of the national level, aconsiderable improvement in percentage over the period (Table 9, Panel B).
The declines in the poverty rate and poverty gap among the elderly in New Brunswick
fueled the improvement in the index. Between 1981 and 2019, the poverty rate for the elderly

24This may include persons who are 65 in the household

83declined 0.76 percent annually, though it remained above Canada’s for the period.25 The poverty
gap declined 0.77 percent per year over the same period.
New Brunswick and Canada saw the fastest growth in the index of risk from poverty in
old age between 1981 and 2000 at a rate of 8.76 percent per year and 4.47 percent per year
respectively. In contrast, growth between 2000 and 2019 was negative for both the province andthe country (-2 percent per year for the province and -1.6 percent per year for the country).
However, the largest negative growth for the index of security imposed by poverty in old age forboth the province and the country was between 2000-2008 (-2.9 percent and -2.4 percent
respectively), (Table 9, Panel C), when the poverty rate grew very sharply (5.3 percent per year
for the province and 6.84 percent per year for the country).
Chart 44: Risk from Poverty in Old Age and its Subcomponents in New Brunswick and Canada,
1981-2019
Panel A: Poverty Rate for the Elderly
30

Per Cent

25
20
15
10
5
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Panel B: Poverty Gap among the Elderly
25

Per Cent

20

15
10
5
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

25

Within this period, growth in the poverty rate exhibited much variation. This volatility reflects how the poverty
rate from LIM is a relative measure. After 1995, the poverty rate for the elderly increased, as the rising real incomeof the general population experienced faster growth than the income of the elderly, which follows the inflation rate.
See Andrews (2015) for further discussion on the linkages between the IEWB and the use of absolute versus relative
measures of poverty.

84Per Cent

Panel C: Index of Risk from Poverty in Old Age
1.000
0.900
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Source: IEWB Database 2019, Table 7

Table 12: Summary of Components for the Risk from Poverty in Old Age for New Brunswick, for1981, 2000, 2008, 2014, 2019

Poverty Rate forElderly
Poverty Gap
among theElderly

1981

2000

2008
Percent

2014

2019

26.6

12.3

18.6

21.6

19.9

19.1

11.5

12.8

11.8

14.5

Relative to
Canada(Percent)
Poverty Rate forElderly
Poverty Gap
among theElderly
Index of Risk
from Poverty in
Old Age

130.4

161.8

144.2

172.8

130.9

100.5

78.8

84.2
Index Level

76.1

91.8

0.150

0.738

0.583

0.556

0.502

85.0

86.6

Relative to
Canada(Percent)
Index of Risk
from Poverty in
Old Age

43.6

93.8

89.6

Source: IEWB Database 2019, Table 785

E. Index of Economic Security
We generate the scaled index for the domain of economic security by aggregating thescaled values of the four components. The contribution of each component is the product of its
scaled value and weight. The weights used for this aggregation procedure are constructed fromthe relative sizes of the populations subject to each risk.
In the table#, it can be noted that the risk imposed by unemployment and the risk
imposed by illness were almost the same at the beginning and at the end of the period for boththe province and the country, and that the weight is similar between the province and thecountry. In contrast, the risk imposed by single-parent poverty decreased by about half, while therisk imposed by poverty in old age doubled for New Brunswick. Canada has also had this trend,
but to a lesser extent.
Table 13: Weights associated to each risk of the Index of Economic Security for New Brunswick
and Canada, for 1981 and 20191981

New Brunswick
2019

Risk imposed by
0.27
Unemployment
Risk imposed by
0.42
Illness
Risk imposed by
0.24
Single-Parent
Poverty
Risk imposed by
0.07
Poverty in Old
Age
Source: IEWB Database 2019, Appendix 29

Canada
1981

2019

0.29

0.28

0.29

0.44

0.42

0.44

0.14

0.22

0.15

0.13

0.08

0.12

In 2019, the index of the economic security domain in New Brunswick was 0.449,
ranking tenth in Canada (Chart 51). Within the Atlantic region, Newfoundland and Labrador had
the highest level of economic security. The Atlantic provinces had the lowest scores in Canada
for this index.
Chart 45: Index of Economic Security by Province, 2019
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
QuebecNew Brunswick
Nova Scotia
Prince Edward Island
Newfoundland
Canada
0.000

0.626
0.574
0.549
0.519
0.498
0.554
0.449
0.340
0.492
0.496
0.556
0.100

0.200

0.300

0.400

Index Level
Source: IEWB Database 2019, Table 8

86

0.500

0.600

0.700

The index of economic security in New Brunswick was below Canada's index (Chart 52)
and it fell by -0.27 percent per year between 1981 and 2019. However, given that Canada also
experienced over the period a negative annual growth in its index of economic security and more
pronounced than the province (-0.31 percent), it results that in 1981, New Brunswick’s index of
economic security represented 79.6 percent of the one of Canada and in 2019 it was 80.7 percent
of Canada’s index of economic security level (Table 9, Panel B).
Chart 46: Index of Economic Security by Province, 1981-2019
0.700

Index Level

0.600
0.500
0.400
0.300
0.200
0.100
0.000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
CanadaNew Brunswick

Source: IEWB Database 2019, Table 8

Table 9 summarizes the findings for the components of the economic security domain in
New Brunswick from 1981 to 2019.
In summary, all indices were higher in 2019 compared to 1981 except for the risk
imposed by illness index.
Compared to Canada, only the risk imposed by single-parent poverty has managed to
exceed the Canadian level reaching 110.4 percent in 2019. The highest percentage, according to
the years chosen as references, was in 2014, 117.5 percent of Canada’ s index level.
In terms of growth rates, between 1981-2019, due to the negative growth of the risk
imposed by illness (-2.77 percent) and which recall it is weighted the most among the variablesof the index of economic security, caused a decrease of -0.01 percent of this index. Since the risk
imposed by illness is weighted the most, it also has the greatest impact on the index of economic
security. For example, between 1981-2000, the fall in the risk by illness was -1.71 percent per
year, but the growth in the risk imposed by poverty in old age was 8.76 percent per year, yet theindex of economic security had a growth of only 0.28 percent per year. This is due to the factthat the risk by poverty in old age had the lowest weight among all variables at that period. The
growth rate’s largest fell in absolute terms was between 2000-2008 (-1.21 percent), mainly due
because of the fell in the index of risk imposed by illness (-5.54 percent) and the fell in the index
of risk imposed by poverty in old age (-2.91 percent). In the last subperiod, the growth in theindex of risk imposed by unemployment and the growth in the index of risk imposed by singleparent poverty was the largest, all subperiods combined (2.7 percent per year and 2.2 percent per
year, respectively) which resulted in the index of economic security (-0.6 percent per year).
87

Table 14: Summary of Components of the Economic Security Domain in New Brunswick, 19812019
Panel A: Index Level
Risk Imposed by
Unemployment
Risk Imposed by
Illness
Risk Imposed bySingle-Parent Poverty
Risk Imposed by
Poverty in Old Age
Index of Economic
Security (weighted)

1981

2000

2008
Index Level

2014

2019

0.522

0.569

0.630

0.559

0.639

0.620

0.446

0.283

0.297

0.213

0.364

0.512

0.627

0.686

0.765

0.150

0.738

0.583

0.556

0.502

0.497

0.524

0.476

0.462

0.449

1981

2000

2008
Per Cent

2014

2019

82.8

88.7

94.4

89.0

94.4

79.5

90.6

66.9

65.0

50.6

85.1

88.6

103.6

117.5

110.4

43.6

93.8

89.6

85.0

86.6

79.6

90.2

86.3

83.9

80.7

Panel B: Relative to Canada
Risk Imposed by
Unemployment
Risk Imposed by
Illness
Risk Imposed bySingle-Parent Poverty
Risk Imposed by
Poverty in Old Age
Index of Economic
Security (weighted)

Panel C: Compound Annual Growth Rates

Risk Imposed by
Unemployment
Risk Imposed by
Illness
Risk Imposed bySingle-Parent Poverty
Risk Imposed by
Poverty in Old Age
Index of Economic
Security (weighted)

1981-2019

1981-2000

2000-20192000-2008
Per Cent

2008-20192008-20142014-2019

0.53

0.45

0.6

1.3

0.1

-2

2.7

-2.77

-1.71

-3.8

-5.5

-2.5

0.8

-6.4

1.97

1.81

2.1

2.6

1.8

1.5

2.2

3.24

8.76

-2

-2.9

-1.4

-0.8

-2

-0.27

0.28

-0.8

-1.2

-0.5

-0.5

-0.6

Source: IEWB Database 2019, Table 888VII. Conclusion
This report presents estimates of the Index of Economic Well-being for New Brunswick
from 1981 to 2019.
Since 1981, the IEWB for New Brunswick has improved. The overall IEWB rose 0.189
points from 0.288 in 1981 to 0.477 in 2019 in New Brunswick. This improvement amounts to a
growth rate of 134 percent per year.
However, on a less positive note, growth in the IEWB for New Brunswick was higher inthe 1981-2000 sub-period than in the 2000-2019 sub-period. Annual growth in the first period
was 2.25 percent per year, which was higher than the growth in the second sub-period, 0.4
percent per year. The only time when the growth rate for IEWB for this province fell in absoluteterms was between 2008-2014 (-0.3 percent per year). After 2014, however, the growth rate
improved to 1 percent per year, the second highest growth rate in the period.
The overall increase in economic well-being was driven by robust growth in consumption
and a considerable growth in equality. The index of consumption increased 0.502 points or 4.31
percent per year from 0.127 points in 1981 to 0.629 in 2019. Significant increases in personal
consumption per capita, government expenditures per capita and in unpaid work per capita
mainly accounted for the growth in the consumption domain over the period. However, due tothe fall in the growth rate of unpaid work per capita (-0.2 percent per year) between 2000-2019
compared to 3.09 percent per year for 1981-2000 and the increase in regrettable expenditures
between the second sub-period, the consumption domain experienced slower growth in the 20002019 sub-period compared to the 1981-2000 sub-period 1.73 percent versus 6.96 percent).
The wealth domain in New Brunswick had a fall of -0.24 percent per year over theperiod. The index of wealth decreased 0.017 points from 0.198 points in 1981 to 0.181 points in
2019. After the 2000s, the province experienced only negative growth until 2014-2019 (0.3
percent per year). The worst negative growth was between 2008-2014, caused not only because
the natural resources stock had a fall in their growth rate of 8.84 percent per year (the lowest rate
among all periods), but also because the net international investment grew by 19.25 percent per
year, never such a high rate has been recorded in any period. The growth between 2014-2019 has
been possible through a return of positive growth in the natural resources stock (2.9 percent per
year, the largest all periods combined) and an undeniable improvement in net international
investment of -4 percent per year.
The domain of economic equality was the second fastest growing component of theIEWB for the overall period. Given the greater weight given to the index of poverty intensity andthe fact that this index generally had higher growth rates than the index of income inequality, theresult was an increase of 1.81 percent per year in the index of economic equality between 198189

2019 from 0.329 points in 1981 to 0.651 points in 2019. The highest growth rate of the index of
economic equality was at the end of the period, between 2014-2019, 3.4 percent per year. This ismainly due to the largest growth rate that the index of poverty intensity had during the period
analyzed, 4 percent per year, as the index of income inequality had a growth in absolute terms of
1.8 per cent per year.
The index of economic security decreased 0.048 points or -0.27 per cent annually from0.497 in 1981 to 0.449 in 2019, largely as a result from deterioration in the risk imposed byillness. The risk imposed by illness was the only one to have a lower value at the end of theperiod (0.213 points) than at the beginning (0.620 points). Its negative growth rate was -2.77
percent per year between 1981-2019. At the end of the period, as a result to a constant growthduring the period, the index of risk imposed by single-parent poverty was the highest (0.765
points) compared to the other indices that compose the index of economic security. The index ofrisk imposed by unemployment had the lowest growth, -0.50 percent per year between 19812019. In contrast, the risk imposed by poverty in old age had the highest growth over the period,
3.24 percent per year and even a growth rate of 8.76 percent per year during the first sub-period.
However, its associated weight was for a long time of the overall period the lowest, so its large
growth rate had a small impact on the global growth of the index of economic security.
When comparing the levels in 2019 of the IEWB and its components across provinces(Exhibit 5), New Brunswick had relatively low rankings. For the IEWB level, the provinceranked ninth among the other provinces. At the component level of the IEWB, the level of theprovincial consumption index was in ninth place. While for the wealth index and the security
index, the province ranked ninth and eighth, respectively. Nonetheless, the province stood out by
taking second place in the equality index. In terms of growth rates between 1981-2019, theprovince stands out more. As a result of its growth rate for the IEWB, the province ranked thirdamong the provinces. The lowest ranking was in the growth of the wealth index (eighth place),followed by fifth place in the growth rate of the index of security. The province held its bestplaces in the growth rate of the consumption and equality indexes, third and second place,respectively.
These findings indicate that economic well-being in New Brunswick has achieved
significant improvement since 1981.

90

Exhibit 5: Ranking by Index of Economic Well-being and its Components, Canada and theProvinces
Panel A: Levels
Levels in 2019
Rank

Index of Economic
Well-being

Index ofConsumption

Index of WealthIndex of Economic
Equality

Index of Economic
Security

1

British Columbia

Alberta

Newfoundlandand Labrador

Alberta

British Columbia

2

Newfoundland

Ontario

British Columbia

New Brunswick

Alberta`3

Alberta

British Columbia

OntarioPrince Edward
IslandCanada4

Ontario

Nova Scotia

QuebecBritish Columbia

Quebec5

CanadaCanadaManitoba

QuebecSaskatchewan

6

QuebecManitoba

CanadaCanadaManitoba

7

Manitoba

Newfoundlandand Labrador

Saskatchewan

Newfoundland andLabrador

Ontario8

Prince Edward
IslandSaskatchewan

Prince Edward
IslandOntario

Newfoundland andLabrador

9

New Brunswick

New Brunswick

New Brunswick

Nova Scotia

Prince Edward Island

10

Saskatchewan

QuebecAlberta

Manitoba

New Brunswick

11

Nova Scotia

Prince Edward
IslandNova Scotia

Saskatchewan

Nova Scotia

Panel B: Growth Rate
Growth Rates, 1981-2019
Index of Economic
Equality

Index of
Economic
Security

New Brunswick

Newfoundland

Prince Edward
IslandPrince Edward
IslandQuebecNewfoundland andLabrador

BritishColumbia

Prince Edward
IslandOntario

Saskatchewan

QuebecBritish Columbia

Manitoba

British Columbia

AlbertaNew
Brunswick

6

Manitoba

Ontario

Manitoba

Nova Scotia

Canada7

CanadaCanadaCanadaQuebecManitoba

8

Nova Scotia

Nova Scotia

New Brunswick

Manitoba

Alberta

9

Ontario

British Columbia

Nova Scotia

CanadaSaskatchewan

10

Saskatchewan

Saskatchewan

Saskatchewan

British Columbia

Ontario11

Alberta

Alberta

Alberta

Ontario

Nova Scotia

Rank

Index of Economic
Well-being

Index ofConsumption

1

Newfoundland andLabrador

Newfoundland andLabrador2

Prince Edward Island

New Brunswick

3

New Brunswick

Quebec4

Quebec5

Index of Wealth91

Newfoundlandand Labrador
Prince Edward
IslandReferences
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