Living Standards Domain of the Canadian Index of Wellbeing

This paper, which represents the living standards domain of the new Canadian Index of Wellbeing (CIW), provides a comprehensive overview of trends, in a number of indicators of living standards, over the 1981-2010 period in Canada. Part one examines trends in average and median income and wealth indicators in Canada. Part two looks at the distribution of the income and wealth of Canadians over time, including trends in poverty. Part three discusses trends in income fluctuations or volatility. Part four analyzes trends in the economic security of Canadians, including labour market security, food security, housing security, and the security provided by the social safety net. The report also presents a synthesis of overall trends in living standards, discusses living standard measurement issues, and puts forward a set of headline indicators to capture the essentials of what has been happening to the living standards of Canadians. Finally, the report comments on the sustainability of current levels of living standards. The report provides a comprehensive examination of a large number of indicators of living standards in Canada over the last quarter century and has identified a number of these indicators as headline indicators for the new Canadian Index of Wellbeing. The bottom line is that Canada has become a much richer country, but the top quintile has received the lion’s share of rising income and wealth. Looking at the nine headline indicators for which time series are available, one can immediately see that living standards of Canadians have not unambiguously improved between 1981 and 2010. Indeed, Canadians experienced a widening of income and wealth inequalities. There have been poverty reductions, but the reductions were not nearly as large as the increase in wealth inequality. The recent recession pushed both the unemployment rate and the incidence of long-term unemployment above the 1981 level, though the 2008 levels were below the 1981 levels. Economic security measured by the CSLS index has also fallen dramatically, spurred by a significant decrease in economic security caused by the financial risk associated with illness. Since 1981, many dimensions of living standards in Canada have not improved, and that in spite of a 49.0 per cent surge in gross domestic product per capita. Benefits of growth have been shared very unevenly, and the recent recession has eroded many of the gains that had been made in the last 30 years. Looking forward, the challenges for Canada’s policymakers are significant, but need to be tackled if Canada is to become a fairer, healthier and richer country.