As government presents election-year budget, Canadians are uneasy about economic fortunes

by Ian Holliday | March 17, 2019 8:30 pm

Most say they expect the next 12 months to be a bad time to make a major purchase.


March 18, 2019 – As Prime Minister Justin Trudeau’s government prepares to introduce the fourth budget of its mandate in a crucial election year, Canadian anxiety about the country’s economic outlook is on full display.

A new public opinion poll from the non-profit Angus Reid Institute finds four-in-ten Canadians (40%) saying they expect the economy to worsen over the next 12 months – a greater number than those who expect it to improve (24%) or stay the same (39%).

Further, they are disinclined to see this coming year as a good time to purchase big-ticket items, planning to keep their wallets more tightly as micro-economic concerns remain top of mind.

Most Canadians (55%) say they expect the next 12 months to be a bad time to make a major purchase, and nearly half (48%) are worried that someone in their household could lose a job because of the economy.

More Key Findings:

 

About ARI

The Angus Reid Institute (ARI) was founded in October 2014 by pollster and sociologist, Dr. Angus Reid. ARI is a national, not-for-profit, non-partisan public opinion research foundation established to advance education by commissioning, conducting and disseminating to the public accessible and impartial statistical data, research and policy analysis on economics, political science, philanthropy, public administration, domestic and international affairs and other socio-economic issues of importance to Canada and its world.

 

INDEX:

 

Most say it’s a bad time to make major purchases

Justin Trudeau’s Liberals came to power with an economic platform that included running budget deficits to pay for infrastructure spending, expanding and means-testing the Canada Child Benefit, and cutting taxes for middle income earners, while raising them slightly on higher earners. The party’s refrain was – and has continued to be – that it wants to “grow the middle class[1].”

After three-and-a-half years in power, the Liberals have kept some of those promises[2] and broken others[3], and the nation’s economy has grown fairly steadily[4] (a fact that may or may not be related to anything[5] the Trudeau government has done).

In early 2016, as the Liberals were preparing their first budget, “the economy” trumped all other concerns when Canadians were asked about the most important issue facing Canada. Twice as many chose the economy (47%) as one of their top two issues in an Angus Reid Institute poll[6] in February 2016 as chose any other topic (“jobs/unemployment” came in second, with 22%).

Today, “the economy” as a broad concern lags well behind other issues in the minds of Canadians, but many of those issues – including housing affordability, income inequality, energy and natural resources, taxes, and arguably health care – are economic in nature.

Canadians’ economic concerns, it would seem, have shifted from a broad-based fear of national economic decline to more specific – and personal – fears:

Along these microeconomic lines, most Canadians say they expect the next 12 months or so to be a bad time for them to make a major purchase, such as buying or renovating a home, taking a major vacation, or purchasing a car.

Indeed, more than one-in-five (22%) say they expect it to be a “very bad time” to take on such an expense. Contrast this with just 4 per cent who think it’s a “very good time to make a major purchase” (see comprehensive tables for greater detail[7]).

Age and gender influence opinion on this question, with men generally more bullish on making a major purchase this year than women:

The regional picture is fairly consistent, with more than half saying the next 12 months will be a bad time for taking on major expenses regardless of where they live. That said, Alberta and Saskatchewan are the only provinces where the proportion of respondents holding this view tops six-in-ten:

Politics is an even bigger driver of opinion on this issue, with those in the Conservative and NDP political spheres (see political sphere methodology at the end of this release) much less optimistic than those in the sphere of the governing Liberals.

Concern about standard of living

While Canadians are less likely to name “the economy” as a top issue in Canada today than they were at the start of Justin Trudeau’s term, there is less volatility in their assessment of their own economic situations.

One-in-three Canadians (34%) say their current standard of living is worse now than it was a year ago. The percentage saying this has fluctuated a bit since the first quarter of 2016, but it has consistently outpaced the percentage who see their standard of living improving, as seen in the graph that follows.

These findings may reflect the mixed economic reality Canadians have experienced at the household level over the last four years.

Notably, poverty in Canada is lower than ever[8] (though recent ARI research[9] reveals defining “poverty” is more complicated than it may seem). The government attributes much of the observed decline to its Canada Child Benefit[10] and an increase in the Guaranteed Income Supplement[11] for seniors.

On the other hand, middle class growth – a key component[12] of the government’s 2015 election campaign – has been largely stagnant. Recent income tax data suggests that middle-class households have seen little to no increase[13] in their total income.

Regionally, perceived declines in standard of living are seen in every part of the country, but they’re most acute in the Prairie provinces of Alberta, Saskatchewan, and Manitoba:

Looking forward, roughly equal numbers of Canadians say they expect their standard of living to improve and to worsen in the coming 12 months, with the plurality (42%) expecting no change.

While Saskatchewan and Manitoba are gloomier about their quality of life when asked to look to the future, Albertans buck the trend, expressing optimism about their household’s standard of living for the next year or so.

Joining Alberta in being more optimistic than pessimistic about this question are Quebec and British Columbia, while other regions are more likely to anticipate a worsening than an improvement:

Again, political preferences seem to have a significant influence on perceptions of one’s personal economic prospects. Conservative-inclined respondents are more likely to expect to be worse off a year from now, while those considering a future vote for the Liberals are more likely to expect to be better off. Those in the NDP sphere are more mixed:

Economic attitudes mirror 2015

While three years have passed, and with them a number of policy changes, the sentiments that help to characterize the economic attitudes of Canadians remain quite similar today to where they were in September of 2015:

Regionally, Alberta and Saskatchewan are home to the most anxiety over potential household job losses. Six-in-ten residents in those provinces have this concern, considerably higher than the Canadian average:

Looking at economic optimism through a generational lens, some notable trends emerge. Three-quarters of each age and gender cohort share the worry that young people will be unable to find a good job.

Many expect the economy to worsen in the coming months

Looking at future expectations for the Canadian economy, four-in-ten say they expect conditions to worsen in the coming year, while one-quarter expect them to improve. That said, save for a brief moment of optimism in the first quarter of 2017, this has largely been the case throughout Justin Trudeau’s first term.

Since the last election in October 2015, Canada’s unemployment rate has trended slowly but steadily downward. As noted previously, wages have not increased significantly in that time, but some experts have predicted wage growth in the coming year due to employer demand in tight economic conditions[14]:

Canada’s GDP growth under the Trudeau government has also been relatively strong, though slowing to end 2018. Economists note[15], however, that Canada has been benefiting in some cases from strong growth in the global economy and some factors outside the government’s control.

Provincial Outlook

Looking more specifically at expectations for their own provincial economies, the data show similar levels of optimism, and slightly less pessimism. There are notable differences between provinces, with Alberta showing the most optimism ahead of a provincial election, and Ontario showing among the most pessimism:

*Political Sphere Methodology

Rather than rely on respondents’ potentially faded memories regarding their vote in the 2015 federal election, ARI researchers constructed a measure of political partisanship based on willingness to vote for the main federal parties in a future election under their current leaders.

The question specifically asked respondents how likely they would be to vote for “The Liberal Party led by Justin Trudeau,” “The Conservative Party led by Andrew Scheer,” and “The New Democratic Party led by Jagmeet Singh” in a future election. The response options were “definitely support” the party and leader in question, “certainly consider” them, “maybe consider” them, and “definitely not even consider” them.

Respondents choosing either of the first two options (definitely support or certainly consider) are considered to be a party’s “sphere.” They represent potential supporters of that party, not necessarily decided voters.

It should be noted that the categories are not mutually exclusive. Respondents were asked to give an opinion on each of the main parties and had the option to say they would “certainly consider” each one.

Thus, respondents may appear in the spheres of more than one party.

 

For detailed results by age, gender, region, education, and other demographics, click here[16].

Click here for the full report including tables and methodology[17]

Click here for the questionnaire used in this survey[18]

MEDIA CONTACTS:

Shachi Kurl, Executive Director: 604.908.1693 shachi.kurl@angusreid.org[19] @shachikurl

Ian Holliday, Research Associate: 604.442.3312 ian.holliday@angusreid.org [20]

Endnotes:
  1. grow the middle class: https://www.liberal.ca/middle-class-growth/
  2. kept some of those promises: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html
  3. broken others: https://globalnews.ca/news/4684596/trudeau-fiscal-update-deficit/
  4. grown fairly steadily: https://www.cbc.ca/news/business/canadian-economy-lookahead-1.4959539
  5. may or may not be related to anything: https://www.ctvnews.ca/politics/fact-check-has-trudeau-turned-a-roaring-economy-into-slow-simmer-1.4021089
  6. an Angus Reid Institute poll: http://angusreid.org/federal-issues/
  7. see comprehensive tables for greater detail: http://angusreid.org/wp-content/uploads/2019/03/2019.03.07-Economy-ReleaseTables.pdf
  8. lower than ever: https://www.canada.ca/en/employment-social-development/news/2019/03/canada-reaches-lowest-poverty-rate-in-history.html
  9. recent ARI research: http://angusreid.org/ari-poverty-study/
  10. Canada Child Benefit: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html
  11. increase in the Guaranteed Income Supplement: https://www.newswire.ca/news-releases/canadas-most-vulnerable-single-seniors-will-see-an-increase-of-up-to-947-annually-to-the-guaranteed-income-supplement-585044441.html
  12. a key component: https://www.theglobeandmail.com/business/commentary/article-how-to-address-the-malaise-of-the-middle-class/
  13. little to no increase: https://www.theglobeandmail.com/business/commentary/article-how-to-address-the-malaise-of-the-middle-class/
  14. tight economic conditions: https://www.bnnbloomberg.ca/economics/video/canadian-wage-growth-to-pick-up-in-2019-given-tight-labour-market-conditions-economist~1578516
  15. Economists note: https://globalnews.ca/news/4795676/justin-trudeau-liberals-credit-canada-economy-jobs/
  16. click here: http://angusreid.org/wp-content/uploads/2019/03/2019.03.07-Economy-ReleaseTables.pdf
  17. Click here for the full report including tables and methodology: http://angusreid.org/wp-content/uploads/2019/03/2019.03.12-economics.pdf
  18. Click here for the questionnaire used in this survey: http://angusreid.org/wp-content/uploads/2019/03/2019.03.07_economy_solo.pdf
  19. shachi.kurl@angusreid.org: mailto:shachi.kurl@angusreid.org
  20. ian.holliday@angusreid.org : mailto:ian.holliday@angusreid.org

Source URL: http://angusreid.org/economy-trudeau-budget-2019/