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Economy

When the economy becomes an obsession

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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?

 

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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