An internal government report says the average middle-income salary rose a mere 1.7% from 1993-2007, while the Bank of Canada inflation calculator show prices of goods and services rose 28% over the same period, putting the middle class further and further behind.
Photo Credit: Kate Adach

“The Canadian Dream” fading for the middle-class

More and more middle-class Canadians are trying to maintain their middle-class lifestyle by borrowing against the future, while others are borrowing to reach that dream, or simply giving up altogether.

A document obtained by the Canadian Press under the Access-to-Information Act, says the Canadian dream for most people is becoming more “myth than a reality”.

The document was prepared last October for the ruling federal Conservative government by experts in the Employment and Social Development Canada,which runs income-support programs like Employment Insurance, the social programme providing temporary financial help for workers who lose their jobs.

It says that in the 15 year period covered by the report, from 1993 to 2007, average middle-income wages rose only 1.7 percent.

In that same period the Bank of Canada inflation calculator shows that the cost of a “basket” of goods and services rose over 28%.

(by 2014 the cost for that same basket of goods and services would have risen over 44 percent from 1993)

The reporting period in the internal document ends prior to the 2008 global economic crisis in which a great many well-paying manufacturing jobs were lost in Canada, causing a severe financial blow to middle-income families.

The internal report also says “many in the middle spend more than they earn, mortgaging their future to sustain their current consumption.”  It also indicates that, “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.”

The report paints a rather different picture than that presented in the most recent federal budget which suggested a “typical Canadian family was doing quite well.    The Conservative government says that a million new jobs have been created since the recession. It also often points to Canada’s relative economic stability compared with other industrialized countries, along and various tax cuts provided to “average” families since 2006, saying it’s saved the “typical” family $3,400 a year through tax cuts..

The Conservative government says that “typical” family includes working parents who together earn $120,000 a year, with two children.

No budget documents actually refer to the “middle-class” and there are only three references to “middle-income”

The opposition Liberal party, which in contrast often mentions the plight of the middle-class, says the document is proof that Canadians are being squeezed and that the ultra-rich are benefitting while most other Canadians are lagging behind.

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