Economic considerations are at the heart of all political decisions. Subsidies, reluctance to widen the social safety net or further protect the environment – everything seems designed to ensure stronger growth in our consumption.
We bow to the demands of business lobbies. Billions are given to big businesses. Governments will even choose to relocate families, despite the negative impact on their mental health, rather than force a company to comply with environmental regulations.
Why is this? Because elected officials – and their constituents – believe that improving well-being only happens when people’s wallets are fatter. But isn’t it often said that money can’t buy happiness?
It is an age-old debate, but a trove of data sheds light on the subject. And it shows that having more money does increase your well-being, up until you reach an income threshold that allows you to live comfortably, with a roof over your head and enough to eat. Beyond this threshold, which most of us have reached, having more money increases well-being, but only temporarily, and only if you’re making more money than your friends.
Not only must we keep up with the Joneses, we must surpass them.
Research shows that economic growth has little long-term impact on life satisfaction in advanced countries. So, should we stop worrying about the economy? Of course not.
A well-functioning economy encourages innovation and ensures we use our limited resources as efficiently as possible. Strong growth helps ensure that everyone has enough income to live comfortably and to take advantage of the infrastructure that improves our quality of life. Also, since we compare ourselves with other regions as well as our nearby neighbours, having an average income comparable to or higher than that of other countries makes us more satisfied with our lot.
The problem is that economic considerations often take on disproportionate importance, to the detriment of other considerations. Again, research shows that there are roughly five important factors that affect our quality of life: our financial situation, our physical and mental health, our sense of belonging to a community, the quality and beauty of our living environment, and the quality of our governance.
It’s also important to ensure that everyone enjoys a good quality of life – again, it’s relative status that matters – and that this quality of life is sustainable for future generations.
All these factors are interrelated in a complex system. The economy cannot be strong if many people have mental health problems, if the government is corrupt, or if we are unable to trust each other. And a strong economy enables most people to have meaningful work, a key determinant of mental health.
The cost of well-being
It’s with that context in mind that governments in several countries have adopted multi-dimensional decision-making frameworks to ensure that their policies effectively improve citizens’ well-being, not just their wallets.
The best-known example is New Zealand’s “well-being budget,” but many other places are following suit. In Quebec, the G15+ collective is doing a lot of work to encourage governments to put well-being at the heart of their decisions. Many researchers across the country are pushing in the same direction.
Canada adopted a quality-of-life framework in the 2021 budget. To be useful this framework needs to be used in the decision-making process. The limited space given to it in the last federal budget and the little enthusiasm it produced suggest that it is merely being used to tick boxes rather than being incorporated as a useful tool. It’s a shame.
Sometimes it is difficult to choose among contradictory priorities. Is a policy that greatly enhances the economy, but has negative effects on the environment, better for people’s quality of life than another policy that has less economic but also less environmental impact? Or another policy that has no economic or environmental impact, but improves mental health?
How to compare the cost of cutting down trees with the benefit of maintaining jobs in certain industries or regions? It’s much easier to focus solely on the economy, or to avoid transparency about the reasoning behind choices.
Should we be surprised, then, that while the economy is delivering record employment rates, our mental health is declining, the quality of our river water is deteriorating, our greenhouse gas emissions are rising, government services are worsening, confidence in our institutions is eroding, and people’s life satisfaction is not improving?
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
