Canadians Reach Boiling Point on Standard of Living

A new INNOVATIVE poll finds that Canadians’ satisfaction with their standard of living has plummeted over the past two decades. Satisfaction has dropped across every generation, but younger generations are far more dissatisfied than older ones. Canadians no longer believe they are doing better than their parents, and most Canadians disagree that the next generation will enjoy a better quality of life than they do.

The online poll of 1,992 Canadians was conducted in January by Innovative Research Group, providing updated tracking of standard of living, financial confidence, and economic outlook. The results are weighted to 1,500 by age, gender, region, and self-reported past federal vote to accurately reflect the population. A detailed methodology is provided in the report.

Financial confidence has dropped below COVID-19 levels

When Canadians assess their immediate financial circumstances, they are significantly less confident than at any point since we began tracking, including during the 2008-09 economic downturn.

67% believe that the Canadian economy is heading towards either a mild or severe recession, with only 8% saying growth. The share of those saying severe recession has decreased from approximately 50% during the peak of the COVID-19 pandemic to 30% today.

This rising concern is not centered around job anxiety. Only 1-in-3 individuals express concern that either they or their main household earner might become unemployed in the next six months – a slight decrease from the fall and fairly consistent compared to previous years.

Part of the problem continues to be inflation. Even though the Bank of Canada reports declining levels of inflation, the public still fears higher rates. In fact, a growing number of Canadians anticipates higher inflation five years from now, with 36% holding this view today compared to 21% in 2022.

Standard of living declined sharply since 2007

It appears that the bigger issue is the standard of living. INNOVATIVE conducted its benchmark survey of the standard of living in 2007 as part of a broader study comparing American and Canadian productivity. The issue has persisted – attention is growing to the fact that while total GDP is growing due to immigration, average real incomes are declining.

Canadians have noticed. We find a dramatic decline in Canadians’ satisfaction with their standard of living, particularly among younger generations.

Since we last asked Canadians about their standard of living in 2007, net satisfaction has plummeted by 44 points from +54% to +10%. This decline is more pronounced among younger generations. While the Silent Generation (born 1925-1945) experienced a 15-point drop, Millennials (born 1981-96) saw a staggering decrease of 56 points.

When asked whether they agree or disagree with the statement I am able to afford a better standard of living than my parents, 58% agreed in 2007. Today, that figure has dropped to only 36%. A similar trend is observed with the economic outlook. In 2007, 26% agreed that the next generation would be able to afford a better standard of living than the current one, whereas today only 17% share that sentiment. Again, declines are more pronounced among younger generations.

In the Clinton era, Kevin Phillips wrote a book called Boiling Point about the rising discontent in America’s middle classes. Today in Canada, we are witnessing something similar. However, this time it’s not solely about the middle class – it’s generational. Furthermore, it’s not just about having a job but also about how much we earn and how much we keep at the end of the workday.

To see the full story of the decline in perceptions of our standard of living, read the full report!

For further insights into economic transition and potential policy initiatives, please refer to our complementary report.