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Trudeau Promised a Stronger Middle Class. How’d He Do?

Average families have seen small gains under Libs, but many Canadians feel worse off.

By Andrew MacLeod 23 Apr 2019 | TheTyee.ca

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria and the author of All Together Healthy (Douglas & McIntyre, 2018). Find him on Twitter or reach him at

“I want to start with a few questions, my friends,” said Justin Trudeau, looking directly into the camera as the second leaders’ debate of the 2015 federal election began.

“Are you better off now than you were 10 years ago when Stephen Harper became prime minister? Is our country better off? Do you have better job prospects? Do you have confidence that your kids have a brighter future?”

Harper was out of touch with regular people’s struggles, Trudeau said, but a Liberal government would invest in the middle class, run three modest deficits so it could increase spending, and grow the economy. It would raise taxes on the one per cent and lower them for the middle class.

Today, with Trudeau seeking re-election in a vote scheduled for Oct. 21, many Canadians will be asking the same questions he asked four years ago. But now they’ll be asking them about him.

NDP Leader Jagmeet Singh said the answers will be unflattering to the Liberal government.

“I think the results are really clear,” Singh told The Tyee. “After three-and-a-half years, Canadians don’t feel that they’re better off than they were before.”

He cited a January poll that found 46 per cent of Canadians said they were within $200 of being unable to pay their bills each month. Yesterday a new poll bumped that number up to 48 per cent.

“That’s a really staggering number that half of Canadians are on the brink of going bankrupt,” Singh said. “That is a scary feeling, and that shows me clearly Canadians aren’t better off than before.”

He contrasted the strain on average families with the recent revelation that the government is granting $12 million to Loblaws — whose CEO and chair Galen Weston Jr. is worth $14 billion — to buy energy efficient coolers.

“It shows the Liberal government has really helped the powerful and the wealthiest instead of people who need it, everyday families and small businesses,” Singh said. “Our plan and our vision is to help people who need it most.”

On the finance ministry’s website, the government argues that it has made real progress for the middle class.

Using figures from the summer of 2018, it says there was lower unemployment, faster wage growth and stronger consumer confidence than there was when the government came to office in 2015.

In 2015 the government introduced a new tax rate of 33 per cent on income above $200,000, while cutting by 1.5 per cent the tax on incomes between $45,000 and $90,000.

Between the tax cut and changes to child benefits, a “typical middle-class family of four” will have about $2,000 more each year, it said.

The most recent figures available from Statistics Canada suggest average families have seen gains, but that overall, they’ve been small.

In February, the government agency reported that the median after-tax income of families and unattached individuals — the amount that half made more than, and half made less than — rose in 2017 by 3.3 per cent.

That gain, however, followed two years where Canadian wages had been stagnant.

And more recently, Bank of Canada officials have said wage growth has fallen short of where it should be.

In the last four months of 2018 wages barely budged, the growth rate down to 1.3 per cent for the year.

Meanwhile, prices for everything from groceries to shelter rose faster, with Statistics Canada recording a year-over-year inflation rate of two per cent in December 2018.

Wages rose, but they failed to keep pace with inflation.

In March, an Angus Reid Institute poll confirmed relatively few people feel better off. Just 17 per cent of Canadians felt their standard of living was better than it had been a year ago.

Twice as many — 34 per cent — said they were worse off than a year earlier.

The institute said the results may reflect the varying economic realities of Canadians. While the government credits the Canada Child Benefit and an increase to the Guaranteed Income Supplement for seniors for reducing poverty, others haven’t seen improvements.

People everywhere in the country were perceiving a decline in their standard of living, and it was felt most acutely in Alberta, Saskatchewan and Manitoba.

Andrew Jackson, an adjunct research professor in the Institute of Political Economy at Carleton University and senior policy adviser to the Broadbent Institute, said that while there are global forces that have a big impact on incomes and the level of inequality, government policies do make a difference.

“The thing I’d be most critical of is the relatively limited nature of what they’ve done around fair tax reform,” Jackson said.

The government had promised a review of tax breaks for the top one per cent, but it wasn’t until the latest budget that they signalled they were going to do something about how stock options are taxed.

And the “middle class tax cut” the government talks so much about really went to the upper-middle class, limiting how widely its effect was felt, he said.

The government has also lagged in providing stronger public services to help people, Jackson said.

“For struggling middle-class families, if you want to put it that way, drug costs, housing costs, childcare costs, [those are] big items in their spending, but they haven’t really addressed them through expansion of non-market programs in a big way.”

In a February opinion piece published in the Globe and Mail, Jackson said economic and social progress over the past three years had been very limited, and it wasn’t clear that the government had adopted the best overall strategy to raise living standards and achieve greater income equality.

“In short, top-line statistics suggest that ordinary middle-class households are seeing little or no increase in their incomes even as many, especially young people, sink deeper into debt,” he wrote. “This helps explain the rise of the populist right which has targeted (largely imaginary) tax increases as the problem and proposes tax cuts as the solution.”

Tax cuts would inevitably mean cuts to the services Canadians already enjoy, he concluded, so progressives need to instead argue in favour of bold public programs that will help people meet their basic needs.

Success with such a plan for stronger public services would mean that by the time another four-year election cycle rolls around, more people would find they agree with questions like Trudeau’s about whether they and the country are better off than the last time they voted.  [Tyee]

Read more: Federal Politics

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