According to our September 2023 survey of 2,500 Canadian workers, almost half of Canadian workers feel that economic conditions in Canada are “poor.” And another 38 percent said they thought economic conditions were “just fair.”
These results are not surprising given the dire state of the Canadian economy and Canadians' growing pessimism about it. Both inflation and interest rates remain high, and job vacancies are struggling to keep pace with the growing workforce.
We have been tracking perceived inequality since September 2019, when we launched the first of a series of national surveys with the help of the Angus Reid Group.
We then conducted similar surveys each September from 2020 to 2023 with a total of 18,500 participants in our Canadian University of Toronto Work Quality and Economic Life Study. One goal of our study is to track long-term trends in the economic lives of Canadians.
Canadians' View of Inequality
Perceived inequality is difficult to measure, so we used a tried-and-tested method that researchers have used for decades in the Social Inequality module of the International Social Survey Program.
In this method, survey participants are shown images and descriptions of five types of societies, each representing different levels of inequality, and are asked which diagram they think best represents their country.
In our survey, we showed respondents a diagram of the five types and asked them: “What type of society is Canada today – which diagram comes closest?”
A diagram showing five different types of societies with varying degrees of inequality.
Type A represents the most extreme inequality, with a small elite at the top, few people in the middle, and most people at the bottom. Between 1999 and 2019, the International Social Survey found that the proportion of respondents – 19 per cent – who believed Canada was similar to Type A did not change. However, in our 2023 survey, 32 percent believed this to be the case.
The proportion of respondents who viewed Canada as a middle class (Type D) society fell from 29 percent to 16 percent. Perceptions of rising inequality have changed dramatically: 64 percent see Canada as Type A or B.
A graph comparing actual and preferred levels of inequality in Canada.
When we asked participants what they thought Canada should look like, 84 percent preferred a Type D or E society, where the majority of society is middle or upper class. What is notable is the difference between the stability of this preferred level of inequality and the volatility of perceived reality.
The cost of living and perceived inequality
The factors shaping perceived inequality are complex, but their relationship to perceived cost of living is notable.
To measure this connection, we asked participants: “How has your experience with the cost of living changed in recent years?” The number of Canadian workers who said their experience had been “much worse” increased from 28 percent in the last few years year 2019 to 49 percent in 2023.
“We are so careful with our money,” a 31-year-old operations assistant told us. “Housing, food, utilities and fuel are becoming too astronomical for us to handle – we shouldn’t suffer!”
Fear of the cost of living can lead people to feel that economic inequality is worse than it actually is. In 2019, 27 percent of respondents who believed the cost of living in Canada was getting worse viewed the country as a Type A society, with a small elite at the top and most people at the bottom. It is now a whopping 41 percent.
“Everyone I know has cut back on their purchases,” said a 59-year-old delivery worker. “I haven’t bought underwear in five years, toiletries in three years, and I can only eat one meal a day, of nothing.”
Canadians are disillusioned
Our findings support a recent report from Léger, a Canadian market research firm, which found that two-thirds of Canadians feel “everything feels broken in this country right now.”
As one 37-year-old mortgage manager said, “The country's system is rigged to benefit the few at the expense of the many.” Similarly, a 36-year-old photographer said, “Our broken tax system allows the people at the top to exploit the system.”
The economy depends on the productivity of workers, and workers depend on the reciprocity of the economy. It is an exchange relationship that appears to be increasingly at risk as workers are the most affected by inflation.
Perceptions of extreme inequality undermine people's belief that the economy is working for them. This, in turn, dampens their ambitions to improve their economic situation and weakens the hope that their efforts will lead to an improvement in the quality of life.
“Our leaders are doing nothing,” said a 34-year-old personal trainer. “I have zero trust in our political parties.” Similarly, a 47-year-old small farm owner said: “The elite of all parties rob, steal and abuse their power for personal gain and leave the working class to pay for it.”
Those in power should be concerned about the growing gap between perceived and preferred inequality. For example, many Canadians have lost faith in the Liberal Party's election promise to expand the middle class. This loss of trust threatens the Liberal Party's chances of re-election.
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