OTTAWA — Canada’s middle-class is mortgaging its future to stay afloat, making the Canadian dream “a myth more than a reality.”
That’s the blunt assessment of an internal Conservative government report, an unvarnished account of the plight of middle-income families that’s in contrast to the rosier economic picture in this month’s budget.
The document was prepared last October by experts in Employment and Social Development Canada, the department that runs the employment insurance fund and other income-support programs. The Canadian Press obtained the report under the Access to Information Act.
“The wages of middle income workers have stagnated,” it says, referring to the period from 1993 to 2007.
“Middle-income families are increasingly vulnerable to financial shocks.”
The document, drawing on three years of “internal research,” was prepared for the department’s deputy minister, Ian Shugart, shortly before the resumption of Parliament last fall.
“In Canada, political parties are making the middle class a central piece of their agendas,” notes the presentation.
A department spokesman, Jordan Sinclair, said in an email that the research “was not linked to the parliamentary schedule or topics raised within the House of Commons.”
The authors say middle-income families have seen their earnings rise by an average of only 1.7 per cent a year over the 15 years ending 2007.
“The market does not reward middle-income families so well,” says the report. “As a result, they get an increasingly smaller share of the earning’s pie” compared with higher-income families.
Shugart was also told middle-class workers “get lesser government support for their work transitions,” referring to a sharp fall-off in employment-insurance benefits compared with other economic groups.
The analysis stops short of the 2008 global recession, though other analysts have noted the economic crisis wiped out many well-paid manufacturing jobs in central Canada that have supported middle-class prosperity.
The report also refers to debt, saying “many in the middle spend more than they earn, mortgaging their future to sustain their current consumption.”
“Over the medium term, middle-income Canadians are unlikely to move to higher income brackets, i.e., the ‘Canadian dream’ is a myth more than a reality.”