2014 Canada Geographic Salary Differentials

Table of Contents

Introduction ...... 1

Report Methodology ...... 1

Regions ...... 1

Interpreting Differentials ...... 3

Important Notes ...... 4

How to Use the Equations ...... 5

Index by Location ...... 6

Index by Province ...... 8

Introduction The Geographic Salary Differentials (GEO) provides an analysis of pay differentials for 90 Canadian locations, including provinces, regions and cities. The results are based on Mercer's vast database of compensation data. Information on interpreting and utilizing the data presented is discussed on the following pages.

Report Methodology The data for the survey jobs are segmented into five categories for the generation of the regression models - jobs paid less than or equal to $30,000 nationally, those paid from $30,000 to $60,000 nationally, those paid from 60,000 to $90,000 nationally, those paid from $90,000 to $120,000 nationally, and those paid from $120,000 to $150,000 nationally. These segments are intended to mimic naturally occurring breaks in job types, which may result in different pay practices.

The decision as to which model to use when determining a location differential should be based solely on the dollar value of the national compensation level (e.g., less than or greater than $30,000).

The national median is determined for each of the selected benchmark jobs across Mercer sources. Median pay rates by location are then extracted for each of the jobs to produce as many data points as possible for each location.

Although location statistics may be compared to national statistics to determine a single percentage differential for a location, a more accurate representation of this relationship is the equation of "line of best fit", which reflects the relationship continuously over this compensation range. Therefore, national vs. location median data points, as described above, were used in linear regression analyses to develop equations for salary differentials for each reported location.

Regions In addition to cities and provinces, geographic salary differentials have been calculated for a number of Canadian regions. These regions include the sample cities listed in the chart below, as well as smaller municipalities within each area.

GEO Location Name Geographical Area (sample of cities in region) Eastern Ontario Ottawa, Peterborough Northern Ontario North Bay, Thunder Bay, Sudbury Southwestern Ontario Windsor, Sarnia, London, Kitchener/Waterloo

Eastern Québec Québec City, Chicoutimi Western Québec Greater Montréal

Greater Montréal Laval, Longueuil, Montréal Greater Toronto Oshawa, Oakville, Markham, Pickering, Toronto Greater Vancouver Port Moody, Burnaby, Richmond, Vancouver

Other Alberta Excludes Calgary and Edmonton Other British Columbia Excludes Greater Vancouver and Victoria Other Manitoba Excludes Winnipeg Other Nova Scotia Excludes Halifax Other Ontario Excludes Greater Toronto Other Québec Excludes Québec City, Greater Montréal Other Saskatchewan Excludes Saskatoon and Regina

Data from various positions are analyzed in generating the reported differentials. Following is a representative list of these positions:

Accountant Librarian Accounting Manager Machine Operator Accounts Payable/Receivable Clerk Maintenance Supervisor Administrative Assistant Marketing Co-ordinator Applications Systems Analyst/Programmer Marketing Manager Assembler Materials Handler/Forklift Operator Assistant Store Manager Office Services Manager Business Systems Analyst Payroll Administrator Buyer/Procurement Agent Payroll Supervisor Cashier Pharmacy Technician Claims Adjudicator Plant Operator Crew Member Product/Brand Manager Customer Service Representative Production Supervisor Data Entry Operator Professional Engineer Data Security Specialist Receptionist Electrician Sales Clerk Engineer Sales Representative ERP Business Analyst Shift Supervisor Field Operator Shipping/Receiving Clerk Finance Manager Software Developer Financial Analyst Solution Architect Foreman Staff Pharmacist General Labourer Store Manager Graphic Designer/Artist Tax Manager Head Cashier Technologist Help Desk Representative Third Keyholder Position Human Resource Generalist Tradesperson Information Security Architect Translator IT Manager Truck Driver IT Outsourcing Consultant Underwriter Labour Relations Manager Warehouse Shipper/Receiver Lawyer Welder

Interpreting Differentials Data are displayed as follows for each location:

 Evaluation of Equations: The first portion of the exhibit contains an evaluation of the equations for each location. The five equations (jobs paid less than or equal to $30,000, those paid from $30,000 to $60,000, $60,000 to $90,000, $90,000 to $120,000, and $120,000 to $150,000) have been evaluated at national median pay rates. The values for the national medians and the corresponding estimated location medians are displayed with the calculated percent difference between the two medians (percent difference).  Evaluation of Equations Chart: Next to the equation evaluations is a bar chart that graphically displays the percent difference that resulted when the equations were evaluated at ten national median pay rates.  Pay Increases: Actual 2013 and expected 2014 pay increases are displayed for the following employee groups: Management, Professional (Sales & Non-Sales), Office/Clerical/Technician and Trades/Production/Service. This information was generated from data provided by 719 organizations participating in Mercer's 2013/2014 Canada Compensation Planning Survey. For most cities, corresponding provincial or regional data is displayed.  Equations: Regression equations are included to estimate a location median pay rate for any given national median pay rate within the appropriate ranges. These equations are displayed directly below the salary/structure increase information and are labeled "Salaries $30,000 and below", "Salaries $30,000 to $60,000", "Salaries $60,000 to $90,000, "Salaries $90,000 to $120,000", and "Salaries $120,000 to $150,000". The five regression equations were developed by splitting the benchmark jobs into those national pay medians ranging from $30,000 and below, $30,000 to $60,000, $60,000 to $90,000, $90,000 to $120,000, and $120,000 to $150,000.  Trendlines: For each location, a graph is displayed on which the horizontal axis represents the national median annual pay and the vertical axis represents the location median annual pay. The differentials are visually presented by using a blue line at the 45 degree angle to represent a "0 percent difference" between national and area pay. If area pay practices are exactly equal to national pay (0 percent difference), the line for area estimates will fall exactly on this line. If area pay is less than national pay, the green line for area estimates will be below the blue line; if greater than, the green line for area estimates will be above the blue line.

Important Notes The range of median pay rates displayed on the exhibit reflects the most accurate interpretation of the results. Extending the use of the equations beyond these ranges may not produce reliable estimates. This means the $30,000 and below equations should only be used for pay rates up to $30,000, the $30,000 to $60,000 equations should only be used in the pay range of $30,000 to $60,000, the $60,000 to $90,000 equations should only be used for pay rates in the pay range of $60,000 to $90,000, the $90,000 to $120,000 equations should only be used for pay rates in the pay range of $90,000 to $120,000, and the $120,000 to $150,000 equations should only be used for pay rates in the pay range of $120,000 to $150,000.

It is incorrect to assume pay differentials to be the same as cost of living measures for an area. Salary levels in geographic areas relate more specifically to items such as the rate of unemployment and number of qualified labourers in the area (supply and demand). The fact that living costs in an area are high may only have a moderate impact on pay levels in that area.

It is assumed in the analysis that estimated differentials in an area will not become less than minimum wage levels.

It is also important to note that executive positions are not included in this analysis. Company size, industry and/or other qualifiers normally influence executive pay differentials more than geographic location.

Compensation professionals who deal regularly with surveys are aware of the variance that may exist in survey data. The reliability of data may differ by location and rates may fluctuate from year to year due to the change in the participant base. Because of the quantitative techniques used in our analysis, we feel that these results are as reliable as, or more reliable than, other published sources. We would observe, however, that because of the increased sample sizes for larger metropolitan areas, these results are generally more reliable than those from smaller areas.

How to Use the Equations The equations contained in this software can be used to determine the differential between a national pay rate and a comparable pay rate in a particular location. The equations can also be used to compare the pay differentials between two locations.

Determining Area Pay Rates - The following example illustrates how the software determines the location pay rate for a given national pay rate. Note that for each location the equations have already been evaluated at ten national medians. To determine the location median for pay rates other than those displayed, enter the pay rate desired and the calculation will occur as in the following example.

Assume that you want to determine the pay rate in Winnipeg for the national pay rate of $52,000.

First, the software selects the appropriate equation to use for Winnipeg based upon the salary level. As the national pay rate to be converted is $52,000, the second equation is selected:

Winnipeg Median: = (0.974 x National Median) - 900

To determine the Winnipeg median, the national median of $52,000 is substituted in the equation and then evaluated:

Winnipeg Median: = (0.974 x National Median) - 900 = (0.974 x $52,000) - 900 = 50,648 - 900 = $49,748

The percent difference between the national and Winnipeg medians is calculated as follows:

Percent Difference: Winnipeg Median = National Median $49,748 = $52,000 = 0.957 (i.e. – 4.3%)

Comparing Cities - The software also uses the equations to translate rates of pay in one location to comparable rates in a second location.

Index by Location Differentials Available

Up to $30,000 to $60,000 to $90,000 to $120,000 to Location Province $30,000 $60,000 $90,000 $120,000 $150,000 Ajax ON X X Alberta AB X X X X Atlantic Canada CA X X X X Barrie ON X Brampton ON X X X Brantford ON X British Columbia BC X X X X X Burlington ON X X X Burnaby BC X X Calgary AB X X X X Cambridge ON X X X Coquitlam BC X Eastern Ontario ON X X X X Eastern Québec QC X X X Edmonton AB X X X X Fort McMurray AB X X X Fort St. John BC X X Fredericton NB X X X Gatineau QC X Grande Prairie AB X X Greater Montréal QC X X X X Greater Toronto ON X X X X X Greater Vancouver BC X X X X X Guelph ON X Halifax NS X X X Hamilton ON X X X X Joliette QC X Kingston ON X X Kitchener/Waterloo ON X X X Langley BC X X X Laval QC X X X Leduc AB X Lethbridge AB X Lloydminster AB X London ON X X X Longueuil QC X X X Manitoba MB X X X Markham ON X X X X Medicine Hat AB X X Mississauga ON X X X X X Moncton NB X X X X Montréal QC X X X X X National Capital Region CA X X X New Brunswick NB X X X New Westminster BC X X Newmarket ON X X Nova Scotia NS X X X Oakville ON X X X Ontario ON X X X X X

Index by Location Differentials Available

Up to $30,000 to $60,000 to $90,000 to $120,000 to Location Province $30,000 $60,000 $90,000 $120,000 $150,000 Oshawa ON X X Other Alberta AB X X X X X Other British Columbia & Territories BC X X X X Other Manitoba MB X X X Other Nova Scotia NS X Other Ontario ON X X X X Other Québec QC X X X X Other Saskatchewan SK X X X X Ottawa ON X X X Peterborough ON X Pickering ON X X Prairies CA X X X X X Québec QC X X X X X Québec City QC X X X Red Deer AB X Regina SK X X X Richmond BC X X X Richmond Hill ON X Rural Alberta AB X X X Rural New Brunswick NB X X Rural Saskatchewan SK X Rural Southwestern Ontario ON X Saint John NB X X Sarnia ON X Saskatchewan SK X X X X X Saskatchewan & Manitoba CA X X X X X Saskatoon SK X X X X Southwestern Ontario ON X X X X St. Catherines ON X X St. John's NF X X X X Surrey BC X X X Thunder Bay ON X X Toronto ON X X X X X Vancouver BC X X X Vancouver Island BC X Vaudreuil-Dorion QC X Vaughan ON X X X Vernon BC X Victoria BC X Western Québec QC X X X X Winnipeg MB X X X

Index by Province Differentials Available

Up to $30,000 to $60,000 to $90,000 to $120,000 to Location Province $30,000 $60,000 $90,000 $120,000 $150,000 Alberta AB X X X X Calgary AB X X X X Edmonton AB X X X X Fort McMurray AB X X X Grande Prairie AB X X Leduc AB X Lethbridge AB X Lloydminster AB X Medicine Hat AB X X Other Alberta AB X X X X X Red Deer AB X Rural Alberta AB X X X British Columbia BC X X X X X Burnaby BC X X Coquitlam BC X Fort St. John BC X X Greater Vancouver BC X X X X X Langley BC X X X New Westminster BC X X Other British Columbia & Territories BC X X X X Richmond BC X X X Surrey BC X X X Vancouver BC X X X Vancouver Island BC X Vernon BC X Victoria BC X Atlantic Canada CA X X X X National Capital Region CA X X X Prairies CA X X X X X Saskatchewan & Manitoba CA X X X X X Manitoba MB X X X Other Manitoba MB X X X Winnipeg MB X X X Fredericton NB X X X Moncton NB X X X X New Brunswick NB X X X Rural New Brunswick NB X X Saint John NB X X St. John's NF X X X X Halifax NS X X X Nova Scotia NS X X X Other Nova Scotia NS X Ajax ON X X Barrie ON X Brampton ON X X X Brantford ON X Burlington ON X X X Cambridge ON X X X 2014 Canada Geographic Salary Differentials 8 © 2014 Mercer LLC

Index by Province Differentials Available

Up to $30,000 to $60,000 to $90,000 to $120,000 to Location Province $30,000 $60,000 $90,000 $120,000 $150,000 Eastern Ontario ON X X X X Greater Toronto ON X X X X X Guelph ON X Hamilton ON X X X X Kingston ON X X Kitchener/Waterloo ON X X X London ON X X X Markham ON X X X X Mississauga ON X X X X X Newmarket ON X X Oakville ON X X X Ontario ON X X X X X Oshawa ON X X Other Ontario ON X X X X Ottawa ON X X X Peterborough ON X Pickering ON X X Richmond Hill ON X Rural Southwestern Ontario ON X Sarnia ON X Southwestern Ontario ON X X X X St. Catherines ON X X Thunder Bay ON X X Toronto ON X X X X X Vaughan ON X X X Eastern Québec QC X X X Gatineau QC X Greater Montréal QC X X X X Joliette QC X Laval QC X X X Longueuil QC X X X Montréal QC X X X X X Other Québec QC X X X X Québec QC X X X X X Québec City QC X X X Vaudreuil-Dorion QC X Western Québec QC X X X X Other Saskatchewan SK X X X X Regina SK X X X Rural Saskatchewan SK X Saskatchewan SK X X X X X Saskatoon SK X X X X