Middle class dreams a ‘myth’ in Canada: internal government report
The document, which highlights data that is in stark contrast to the current Conservative party messaging, was prepared last October by the department that runs the employment insurance fund and other income-support programs
OTTAWA—The Canadian dream of a middle-class lifestyle has become “a myth more than a reality.”
That’s the blunt assessment of an internal Conservative government report, an unvarnished account of the plight of middle-income families that’s in stark contrast to the rosier economic picture often conveyed by the Prime Minister and his party.
The document was prepared last October by experts in Employment and Social Development Canada, the department that runs the employment insurance fund and other income-support programs. The Canadian Press obtained the report under the Access to Information Act.
“The wages of middle income workers have stagnated,” it says, referring to the period from 1993 to 2007.
“Middle-income families are increasingly vulnerable to financial shocks.”
The document, drawing on three years of what it called “internal research,” was prepared for the department’s deputy minister, Ian Shugart, shortly before the resumption of Parliament last fall.
The authors say middle-income families have seen their earnings rise by an average of only 1.7 per cent a year over the 15 years ending 2007.
“The market does not reward middle-income families so well,” says the report. “As a result, they get an increasingly smaller share of the earning’s pie” compared with higher-income families.
Shugart was also told middle-class workers “get lesser government support for their work transitions,” referring to a sharp fall-off in employment-insurance benefits compared with other economic groups.
The analysis stops short of the 2008 global recession, though other analysts have noted the economic crisis wiped out many well-paid manufacturing jobs in central Canada that have supported middle-class prosperity.
The report also refers to debt, saying “many in the middle spend more than they earn, mortgaging their future to sustain their current consumption.”
Over the medium term, the report says middle-income Canadians are unlikely to move to higher income brackets, stating the “Canadian dream is a myth more than a reality.”
Current Conservative messaging emphasizes a million new jobs created since the recession; Canada’s relative economic stability compared with other industrialized countries; and various tax cuts provided to “average” families since 2006.
“Our government has reduced taxes and made life affordable for Canadian families,” Alexandra Fortier said in an email Sunday, adding a “typical” family of four enjoys tax cuts of $3,400 a year, thanks to Conservative policies.
That “typical” family includes working parents who together earn $120,000 a year, with two children.
Since becoming Liberal leader in April last year, Justin Trudeau has frequently cited the plight of the middle class, a theme repeated at the party’s weekend convention in Montreal.
Toronto Liberal MP Chrystia Freeland commended the public servants who produced the report, saying that for the Liberals “it was like getting a good grade on your homework.”
“This is a very strong, non-partisan, data-driven report, focused on Canada, which confirms our assertion, which is at the centre of our policy, that the middle class in Canada is being squeezed and that we have to do something about it,” she said in an interview from Montreal.
Freeland, who won a November byelection and now is the party’s trade critic, is author of the 2012 book Plutocrats, which argues that wealth distribution has favoured the ultra-rich and left everybody else behind.