Canadians remain pessimistic about the economy, despite positive data
The economic headlines are positive. Canada’s economy is growing, unemployment is near a record low and wage growth has finally started to tick up. But despite all this good economic news, a new poll commissioned by the CBC says most Canadians are still worried about paying for the basics, like food, utilities and housing. To understand this disconnect it’s important to put the results of the poll into perspective.
What did the poll find?
The poll conducted by Public Square Research and Maru/Blue for CBC of 4,500 Canadians finds that 83 per cent of those surveyed said the cost of living was a bigger concern to them than climate change, social inequality, finding a job or even terrorism. Canadians are overwhelmingly worried about the rising cost of living and how they will pay for the basics in the future.
Good economic data
This sentiment comes even though Canadian economic data has been very good. Canada has been performing very well, despite a number of global economic setbacks. For example the trade tensions around the globe that have affected us too. In the last few months we experienced China banning Canadian canola oil as well as the U.S. slapping tariffs on our aluminum and steel. However, the latest GDP data shows our economy is growing better than expected. As well, unemployment remains near a four-decade low. In the first six months Canada added 248,000 new positions; almost all of them are full time. That is the strongest six-month stretch of job growth to start a year since 2002.
The disconnect at work
Canadians are working, but not all of us are working in well paying jobs. Many Canadians are working part time, temporary or contract position. This alone can create job insecurity and make workers feel uncertain about their financial future. According to the website compareyourincome.org, they take publicly available data on income to understand how income is distributed in the country. The average income of the top 10 per cent of income earners is 8.6 times higher than that of the bottom 10 per cent. The average income in Canada is $44,000 but economic resources are not evenly distributed across the country.
The disconnect in housing
Housing costs, especially in cities such as Toronto and Vancouver, have skyrocketed. The old ratio was, you should spend maximum 30 per cent of your after tax income on your rent or mortgage. Now many are spending double that just so they can afford an apartment or home near where they work? We are also carrying record high debt and a lot of your money may be going towards servicing that debt that you have accumulated over more than a decade. The latest numbers from Statistics Canada show we owe a $1.78 for every dollar of disposable income we have.
The disconnect in child care
Outside of Quebec, child care is a growing concern. In many cities parents shell out thousands of dollars a year to have their children in quality care. Down the road parents are also concerned about the cost of their child’s post-secondary education and how they’ll save for it.
If you’re feeling financially insecure, it’s time to start making some changes. Start paying your debt; your loans are the most vulnerable to change in the economy. Take a critical look at your job, ask yourself could you be making more money if you updated your skills. Are you being paid fairly for the work you’re doing? Look into courses that are offered at your workplace. See if there is something you can take for free that will make you more attractive for a promotion or a pay raise. If you’re worried about the cost of living rising, the key is to start protecting yourself now.
Rubina Ahmed-Haq is a journalist and personal finance expert. She is HPG’s Finance Editor. She regularly appears on CBC Radio and TV. She is a contributor on CTV Your Morning and Global Toronto. She has a BA from York University, received her post graduate journalism diploma from Humber College and has completed the CSC. Follow her on Twitter @alwayssavemoney.