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Middle-class dreams a ''myth'': internal government report

Internal document contrasts with rosy economic picture in this month's budget

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% 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."

Current Conservative messaging emphasizes a million new jobs created since the recession; Canada's relative economic stability compared with other industrialized countries; and various tax cuts provided to "average" families since 2006.

A spokeswoman for Employment Minister Jason Kenney said the report reflects "the period of time under the previous Liberal government," from 1993 forward. (The report also covers 2006-2007, the first two years under the Harper Conservatives; the department says an updated report is "not available at this time.")

"Our government has reduced taxes and made life affordable for Canadian families", Alexandra Fortier said in an email Sunday, adding a "typical" family of four enjoys tax cuts of $3,400 a year, thanks to Conservative policies.

That "typical" family includes working parents who together earn $120,000 a year, with two children.

This month's budget acknowledged the need to create jobs and provide workplace training, but the budget documents never refer explicitly to the "middle class." The term "middle income" occurs just three times in the main budget, and once in a news release.

Since becoming Liberal leader in April last year, Justin Trudeau has frequently cited the plight of the middle class, a theme repeated at the party's weekend convention in Montreal.

Research from the Library of Parliament shows that since Jan. 1, 2013, Trudeau has used the phrase "middle class" 52 times in the House of Commons, compared with twice for Prime Minister Stephen Harper and nine times for NDP Leader Tom Mulcair. None of them used "middle income."

Toronto Liberal MP Chrystia Freeland commended the public servants who produced the report, saying that for the Liberals "it was like getting a good grade on your homework."

"This is a very strong, non-partisan, data-driven report, focused on Canada, which confirms our assertion, which is at the centre of our policy, that the middle class in Canada is being squeezed and that we have to do something about it," she said in an interview from Montreal.

"The public discourse has been lagging, we've been in denial."

Freeland, who won a November byelection and now is the party's trade critic, is author of the 2012 book Plutocrats, which argues that wealth distribution has favoured the ultra-rich and left everybody else behind.

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  1. Mark posted on 02/23/2014 08:40 PM
    What will Twinkle Toes Justin do to help the middle class? We all know Liberals by now don't we? The idiot federal liberals will do what all liberal governments do. That is to raise taxes to pay public sector union hogs and to fund silly programs that benefit no one. I'm sure silly Justin thinks Ontario's corrupt liberals are doing a fine job.

    I'm sure the middle class will love a 20% HST.
  2. Sean posted on 02/24/2014 01:45 AM
    The ability of a Trudeau government to deliver on promises made to the middle class is a matter of speculation, and your own view of his party or parentage my sway your speculation.

    The ability of the Harper government to deliver on his promises to the middle class is a matter of record, and this report would indicate that his performance leaves much to be desired.

    Say what you will about the Liberals - fair comments can be made both for and against them.

    If you try to defend Harper's record, the facts simply don't back you up.
  3. Diana posted on 02/24/2014 07:27 AM
    It's the public sector unions that are sucking the life and money from the rest of the population and we all know how corrupt liberals love public sector unions. Trudeau has no hope of keeping government spending and waste under control. Based on the long history of failed liberal election pledges and bald faced lies we should know the JT will only damage the country like Ontario's libs have damaged this province.

    I'll stick with Harper. Easy decision.
    1. HP posted on 02/24/2014 08:07 AM
      @Diana Interesting post an so many levels:

      Unions are the only way that uneducated, unskilled workers can get into the middle class. Eliminate the public sector unions (why not all unions?), taxpayers (and consumers) will not save a penny, possibly pay more for inferior service (and products).

      History shows that Liberals, unlike the Conservatives, have kept most of their promises, that's why they kept getting elected. The Conservatives under ethics-challenged leaders like Mulroney and Harper not only lied, they stole, and in Harper's case, is turning Canada into a police state...don't forget all those lies during the senate scandal, defence procurement, and our joining America in Afghanistan where Canadians died so we could sell our softwood lumber down south.

      Those that follow politics in Canada have been incredibly impressed with Mulcair and his NDP. During the senate scandal he proved himself the best parliamentarian in the last 100 years. Not saying that NDP should get our votes, but he's the best leader we've had in years.

      Tory is a professional politician who used his radio show for self promotion, much like the Ford brothers. He has no new ideas and only recycles elitist policies that benefit those already in power...if elected mayor, he may be a worse mayor than Ford.
    2. Dean posted on 02/24/2014 12:16 PM
      @HP "Unions are the only way that uneducated, unskilled workers can get into the middle class."

      If you have no skills and no education, you don't deserve to "get into" the middle class. It's that simple.
    3. Frankie posted on 02/24/2014 01:03 PM
      @HP Thanks HP for describing what unions stand for....uneducated unskilled workers getting into the middle class. You've just proven why there's so much discontent with unions, hiring those who are incapable of the job they're being paid to do vs hiring those capable of doing the job.

      THANK YOU!
    4. Will posted on 02/24/2014 02:25 PM
      @Frankie I'm pretty sure HP was kidding, but perhaps was too subtle that everyone thought he was serious (?).
    5. Frankie posted on 02/24/2014 02:45 PM
      @Will His other posts are consistent with this one so I believe he is quite serious.
  4. Frankie posted on 02/24/2014 09:41 AM
    I believe the single biggest reason the middle class has been squeezed has to do with the uncontrollable growth of government and the taxes needed to feed that growth.

    10% of Ontario labour force works for government, a frightening statistic, especially considering the waste required to feed the public service. Government spending is 2-3X the cost compared to private sector.

    Public sector unions are usually grossly overcompensated compared to private sector unions.

    If we ever had political leadership to deal with those issues the middle class would be the greatest beneficiary as their tax savings would be greater than all other groups.
  5. Dean posted on 02/24/2014 11:29 AM
    Gee, what a shocker. Nearly half my damn paycheck gets confiscated to pay for the sky-high wages the public sector have blackmailed out of the province, or to pay for some jackass on welfare who can't figure out that he should get a job BEFORE getting his girlfriend pregnant.

    Quit taking the money I've earned and giving it to people who haven't earned a dime of it.
    1. john posted on 02/24/2014 01:26 PM
      @Dean hear hear !! well said mate .
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