Canada’s Growing Gap

The Sleeper Issue of the Next Election?
November 27, 2006

Could inequality be the sleeper issue of the next federal election?

A new national poll conducted by Environics Research for the Canadian Centre for Policy Alternatives shows a record-high 76% of Canadians believe the gap between rich and poor has widened over the last 10 years.

The poll also shows that half of Canadians believe they are only one or two missed pay-cheques away from being poor.

And yet our political leaders haven’t uttered a word of concern about the growing gap – a gap that just keeps growing, in good times and bad.

The context here is important. Canada’s blistering pace of economic growth in the last 10 years outperformed every other G-7 nation. Unemployment is lower than it has been in more than a generation.

So how can it be that a growing number of Canadians are fearful about their financial security? Two-thirds believe that the majority of Canadians have not benefited from the country’s economic growth—that a disproportionate share has gone to the rich instead.

The poll tells us a story of worry.

Canadians worry about what will happen if we continue to allow the gap to grow unchecked. They worry the Canada we know and love will undergo regressive changes – such as more crime and a shift toward an Americanized way of life.

As Canadians reject that undesirable vision for our society, they are also becoming a nation of nail-biters, worrying about where Canada is headed. Our federal politicians should take heed.

Economic insecurity is now a fact of life for most workers, regardless of where we fit into the income spectrum. There was a time when working families were secure in the knowledge that jobs were theirs for life. Those times are gone.

More Canadians – especially younger workers – now work in temporary jobs, moving from contract to contract, with less reliable hours of work and little if any pension coverage. The percentage of new employees working in temporary and insecure jobs practically doubled in recent times, rising from 11% in 1989 to 21% in 2004.

Canada’s economy may have been booming in recent years, but every year more good-paying jobs are being replaced by work that is less secure and/or work that pays less and fails to offer benefit packages.

Stagnant or falling incomes for the majority are adding to Canadians’ growing sense of economic insecurity. Finding work is no guarantee of rising out of poverty if the job pays only the bare minimum wage.

More women are working, but even many families with two incomes are still struggling to make ends meet. And it’s getting harder to know how long a job will last these days, or whether it will cover health or retirement costs.

Government transfers that used to cushion the financial downturns for middle- and low-income Canadians have been pared back or cut altogether. The social safety net no longer catches most working Canadians when they fall on hard times.

Employment Insurance, for instance, was there for 74% of unemployed workers in 1989, but after deep cuts to the program in the early 1990s, coverage dropped to only 36% of the unemployed by 1997.

No wonder so many Canadians fear they are only a missed pay-cheque or two away from poverty.

Canadians know there has been a major transformation in the work world. In focus groups conducted by Environics Research for the CCPA last summer, Canadians talked about the impermanence of work, the lack of well-paying jobs, and other, newer forms of insecurity – like where they can afford to live, or whether they can find child care and health care.

It costs more to fill their gas tanks and to heat their homes. Housing prices have soared. Canadians are relieved if they own a home; the equity is very comforting. Yet the rising cost of living hangs over their head like ominous storm clouds.

While Canadians may worry about their household bottom line and their personal future, what’s clear in this poll is that they are equally worried about the direction their country might be going.

Canadians have been ahead of politicians before, on the environment and health care. Now they’re identifying the growing gap as a cause for national concern. Any politician who seriously tackles this inequality problem will have the backing of the vast majority of voters. Eventually, Canadians will demand it.

Armine Yalnizyan is director of research at the Community Social Planning Council of Toronto and a long-time research associate with the Canadian Centre for Policy Alternatives (CCPA). Trish Hennessy is Director of the CCPA’s Growing Gap Project.