Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland pose for a picture holding the 2024-25 budget, on Parliament Hill in Ottawa, on Apr.16.Patrick Doyle/Reuters
Just 5 per cent of Canadians expect that the next generation will be better off than we are today, according to a recent poll. However, the key to preventing such an outcome – more economic growth – is seen as a good thing by only one-third of Canadians.
Similarly, just one-third of respondents think higher economic growth spells higher wages for low-income and middle-class Canadians, while 65 per cent believe it means “increased income for the rich.”
The findings come from Boston Consulting Group’s Canadian consumer sentiment survey, which polled 3,062 people in May and June. The results, which are not usually made public, were sent to me by Keith Halliday, who until recently ran the BCG Centre for Canada’s Future, an internal think tank.
Will more economic growth lead to a more equal Canada? Just 22 per cent of respondents believe so, whereas 40 per cent disagree. Does more economic growth mean more crowded schools, hospitals and emergency room? Sixty per cent think so; just 15 per cent disagree. Sixty per cent expect higher economic growth will cause higher housing and rent costs; just 13 per cent disagree.
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Overall, the survey finds that 72 per cent of Canadians believe that more economic growth means a higher cost of living for them.
Canadians appear to have concluded that a growing economy, rather than an answer for many problems, is the problem. They mostly don’t think it will make their lives better, and they tend to believe it will make their lives worse.
You could read these depressing results as proof of Canadians’ ignorance. I think it’s something else, namely a sign of public wisdom. When politicians start going on about plans to “boost economic growth” – or “raise productivity,” or “increase our competitiveness” – the public often hears something different. Experience has taught them to hear something different.
For the past four decades, what they have often heard are antonyms for “prosperity,” and synonyms for “pain.”
From the 1940s until the early 1970s, the developed world lived through an economic golden era. In France, they called it “les Trente Glorieuses” – the Glorious Thirty. That’s also an apt term for what happened in Canada during those three decades of very high economic growth.
The benefits of that growth were equally distributed. In fact, they were more than equally distributed, with wages and wealth rising faster at the bottom and middle than at the top. Most people experienced rapidly improving circumstances: rising wages, better and more affordable housing, the introduction of universal health care, a massive expansion of higher education, and on and on.
The economic pie grew fast, and the middle-class slice grew faster. National economic growth translated into a boom in the average family’s home economics.
By the 1980s, however, those happy trends had unwound. The pie grew more slowly, and the middle-class slices grew less, or not at all. It was coupled with rising income and wealth at the top end. That’s been the story ever since.
The era of boundless economic growth delivered an ever-expanding gusher of tax revenues, to finance new social programs, new public transit and highways, new universities, whatever. But the slowdown that followed left governments facing a mismatch between ambition and resources.
One of the key challenges has been: how to boost growth? The answer over the past 40 years has usually focused on making government smaller, trimming regulations, and lowering taxes on business and investment, in the belief that these will fertilize faster growth.
That has mostly not worked as promised, and it has often made life more difficult for middle-class people. As a result, when a pollster asks, “Is economic growth a net positive for Canada?,” what many people actually hear is something like this:
“We need to cut government spending, lower taxes on businesses and high-earners, reduce public services and lower your quality of life. We hope this will spark economic growth. So: Do you think economic growth a net benefit for you?”
The Trudeau government told a similar story about its policy of greatly raising immigration, and even more radically supersizing the temporary foreign worker streams. It was all said to be justified and necessitated by the needs of the economy.
But Ottawa did not consider or plan for inevitable consequences, such the pressure on housing and social services. It also failed to grasp that this method of growing gross domestic product would lower GDP per capita.
It’s the latest example of the mantra of “economic growth” being invoked for what is basically false advertising, to sell a policy that the average Canadian is experiencing as a source of economic anxiety rather than relief.