How has the past decade been for you? Are you happy with your financial progress?
Answering that question is difficult without knowing how other people are doing – and that information can be surprisingly hard to decipher. Statistics Canada showers us with charts that break down incomes and net worth by age groups, regions and other factors. However, it can still be difficult to answer simple questions about how typical Canadians are faring and why.
Maybe it’s time for government statisticians to provide more detailed updates on a regular basis. The Wall Street Journal reported this past week that the Bureau of Economic Analysis in the United States is developing measurements to determine how much of the country’s economic growth is going to rich households, how much to the middle class and how much to the poor.
Canada could benefit from similar gauges, as well as from more accessible information on other scores. As things stand, you can arrive at very different impressions of the past decade depending on which yardstick you examine.
Gross domestic product (GDP), the most widely quoted measurement, indicates the real value of goods and services produced in Canada. It has climbed about 19 per cent since the final quarter of 2008 – not a very impressive level of growth compared with previous decades.
But that doesn’t mean most Canadians have encountered tough times. Statistics Canada’s household economic accounts indicate that Canadian households as a group have enjoyed a jump of more than 50 per cent in nominal net worth since 2010.
To be sure, that large advance spans some big differences among groups.
Homeowners and investors have been among the most fortunate. The average home price in major Canadian cities jumped 81 per cent from March, 2009, to March, 2019, according to the Teranet-National Bank House Price Index. Over a similar period, the S&P/TSX 60, an index of large Canadian public companies, produced a total return of nearly 123 per cent.
Changes over the past decade
Consumer prices
Total inflation
Canadian university tuition
44.0%
Toyota Corolla (base model)
27.4
Gas (regular, unleaded)
35.2
Chicken (1 kilogram)
12.8
13.5
Orange juice (1 litre)
Average rent,
(Toronto 2-bedroom apt.)
33.5
Investor gains
Avg. home price (Teranet index)
81.3%
Cdn. stock ETF (total return)
122.9
Cdn. bond ETF (total return)
49.4
Economic measures
26.6%
Average wage
Cumulative inflation
18.0
Cumulative GDP growth
19.1
National net worth
56.6
Based on most recent data available for each.
THE GLOBE AND MAIL, SOURCE: Statistics Canada;
Toyota Canada; Canada Mortgage and Housing
Corp.; Teranet House Price Index; Bloomberg
Changes over the past decade
Consumer prices
Total inflation
Canadian university tuition
44.0%
Toyota Corolla (base model)
27.4
Gas (regular, unleaded)
35.2
Chicken (1 kilogram)
12.8
13.5
Orange juice (1 litre)
Average rent,
(Toronto 2-bedroom apt.)
33.5
Investor gains
Avg. home price (Teranet index)
81.3%
Cdn. stock ETF (total return)
122.9
Cdn. bond ETF (total return)
49.4
Economic measures
26.6%
Average wage
Cumulative inflation
18.0
Cumulative GDP growth
19.1
National net worth
56.6
Based on most recent data available for each.
THE GLOBE AND MAIL, SOURCE: Statistics Canada; Toyota
Canada; Canada Mortgage and Housing Corp.; Teranet
House Price Index; Bloomberg
Changes over the past decade
Consumer prices
Total inflation
Canadian university tuition
44.0%
Toyota Corolla (base model)
27.4
Gas (regular, unleaded)
35.2
Chicken (1 kilogram)
12.8
Orange juice (1 litre)
13.5
Average rent,
(Toronto 2-bedroom apartment)
33.5
Investor gains
Average home price (Teranet index)
81.3%
Canadian stock ETF (total return)
122.9
Canadian bond ETF (total return)
49.4
Economic measures
26.6%
Average wage
Cumulative inflation
18.0
Cumulative GDP growth
19.1
National net worth
56.6
Based on most recent data available for each.
THE GLOBE AND MAIL, SOURCE: Statistics Canada; Toyota Canada; Canada
Mortgage and Housing Corp.; Teranet House Price Index; Bloomberg
In contrast, wage earners received only modest increases. That is especially true if you consider changes in actual purchasing power.
While average wages expanded nearly 27 per cent since 2008, according to Statistics Canada, much of that advance was clawed back by inflation, which reduced the buying power of a loonie by about 18 per cent over that same period.
Inflation hurt some groups more than others. Students, for instance, were hit by rapid rises in university tuition rates.
All of that suggests a growing financial divide. On the one side, presumably, are older, affluent Canadians, who bought homes and stocks years ago and have benefited from their gains. On the other are younger, less affluent Canadians, who face higher costs for education and the daunting task of buying highly priced homes at a time of modest wage gains.
Exactly how big this financial divide may be is open to question. Economists will turn to measurements such as the Gini coefficient, a broad gauge of inequality, but that doesn’t provide detail about which groups are gaining or losing. Meanwhile, Statistics Canada’s Survey of Financial Security provides the most fine-grained picture of household net worth, but it is produced only occasionally. Moreover, it focuses on median households of various ages, with little sense of how wide the variation is around the midpoint.
Better would be a regular report on how Canadians of various income levels and ages are doing in comparison with one another, and delve into the reasons. This could synthesize information Statistics Canada already collects, but put it in a format that would be more accessible to general readers – and to the politicians who help shape the policies that determine how wealth is distributed.