Internal government report calls middle-class dreams a ‘myth’

Document prepared last October says the wages of middle income workers have stagnated between 1993 to 2007


OTTAWA – 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 per cent 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.

Sinclair repeated those talking points when asked for comment on the report.

“Today, the Canadian economy is remarkably strong, setting the conditions for Canadians and their families to succeed and enjoy a high quality of life,” he said. “Middle-income Canadians receive proportionately greater (tax) relief.”

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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Internal government report calls middle-class dreams a ‘myth’

  1. And while Harpo continues to sit on his rump playing games…’s no wonder polls show the Libs rising.

    • Reality is, none of the parties represent the people who make Canada work.

      Thus, through governemtn inflating our costs, taxing us like slaves, we have less to spend on each others middle class jobs. Too busy supporting buddy bailouts, inflated contracts, government political/union waste and a long list of other peoples money for nothing waste and corruption.

      And the only options on the ballot are more statism bloat, more for government and less for the people who support it. Its statism greed ignoring the middle class other than to inflate their costs and tax them more.

      • All our MPS are middle-class

        • Not true. Most are making between 130-200k a year and if they can survive 2 election cycles get gold plated pensions. That’s not middle class.

          • Most of our MPs will never have a job this good in their lives again because they are middle or working class before they are elected. It’s why many people run for election.

            However an MPs salary gets nibbled up too….pension deductions, office stuff…..and you can always lose an election. Assuming you survive all that you get a pension at 65. In the meantime you need to find work after maybe 10 years out of a job.

            It’s not as cushy a life as what you’d think….but there is lower, middle and upper middle-class……and that encompasses most Canadians including our MPs

          • Bull, MPs don’t even pay EI/CPP and deductions reduce their tax load.

            Harper is eligible for a full 100% indexed pension April this year at 55. All MPs need is 6 years for a full pension at 55.

            I bet Harper will never put his income tax on line.

          • almost Emily, most of our mps never had a job!!!

          • LOL sure they did…just not ones that pay as well as this

          • 2 minutes must be a record, you must get outside more often, sunshine might brighten your outlook. gal

          • I work online….I’m here all the time.

          • you should probably get some work done!

          • I do….in between comments. LOL

          • Harper is the 6th paid highest government person in the world.

            Or MPs that are ministers make as much as the President does, and out civil service pays a lot more than the US Secretary of state….

            Not including as you say, those coveted pensions and perks.

        • I would say MPs are upper class, $130k and up. Pension plan vests in just 6 years and is 100% indexed with a guaranteed rate of retire of 10.4% per year. You can retire at 55 with medical, dental, travel insurances for life.

          Only Mulcair needs to mortgage up 11 times with his 6 digit salary, and at his age he should be debt free.

          Average wage of Canadians who make this country work are much less than 1/2 that of a MP and no one has benefits like a MP.

          • Upper-middle class. Upper class is Lord Thompson of Fleet.

            Mortgaging his house is a way of freeing up money for Mulcair….I have no idea what he uses it for.

            The average Canadian wage is much less, yes…..but there are people who take a pay cut to serve as an MP

            MPs aren’t rich….however we do have millionaires and billionaires in Canada

      • You seem in love with the term “Statism” Tell me, what does it mean?

        • It is modern framing language which means any government that is not Anarchist Libertarian.

          • Hey, don’t badmouth anarchy. I miss Mad Max…

        • Statism – government bloat, excessive governemtn. Little individual economic liberty as with all taxes on income to hidden spend side taxes and inflation, the people have lost most of their economic liberty.

          The belief that government knows best, and individuals should forfeit individual economy liberty and yield to government.

          The opposite of libertarianism.

          There is left and right.
          There is libertarianism and statism.

          You can be a Conservative for example, but also be a statism, like Harper.

          All our party leaders are statism. No Libertarian or centrist option exists on our rigged ballots.

          Libertaian view for jobs would be to lower hidden and realized taxes so people could spend more on each others jobs to employ people.

          Statism view is that they can tax people to buy jobs and ignore that taxing people more means they spend less on each others jobs. Statism is about illusions to sell big government so the governemtn decides your futures…or lack of one.

          Not many ask why government can’t solve jobs and economic issues. I submit as government is the problem not the solution. Any time you get so much governemtn consuption for nothing waste bailouts, inflated contracts, big unions…. people pay in taxes, debt and lower value incomes.

          More government, less for the people –> statism.

    • polls, to bad that will be the only thing JT has going for him :(

      • This comment was deleted.

        • Paul Martin was to achieve the largest majority in Canadian history according to the polls just days before the election.

          Dion was to win at the very least a strong minority.

          Iffy, Iggy, whatever……..

          There is only one poll that counts.

          • You know very well Harpo won’t be in there forever….all govts have a limited life, and this one has screwed up more than most.

      • Including the one on election day, isn’t that pretty much all he (or any ) politician needs to have going for him?

  2. Damn public servants. Who let them out to speak truth to power like this? They’ll have to be silenced.

    • Actually, CBC silences the public on this story. To CBC and much of media, people are to be herd and not heard when it comes to statism propaganda. At least Macleans allows comment on government illusions and stories.

  3. Not sure how the Liberals think this benefits them, the report studied the years 1993 to 2007. Who was in power for 13 of those 14 years? It sure wasn’t the Conservatives.

    • lol the libs are a joke, centered around the clown that is JT

      • Aw hon. If you need a hug, all you have to do is ask.

        • dont need hugs, need results. clowns cant run economies

    • None of the parties represent the middle class people who make this country work.

      We are just here to tax like slaves for buddy bailouts, inflated contracts, political/union waste, corporate welfare, union pension top ups, planes for mismanaged union Air Canada and other general governemtn wastes and corruptions.

      Ottawa stopped working for the people who make this country work a long time ago.

  4. No surprise here. Middle class gets less money after taxes, hidden tax inflated pricing on services, less value money from currency devaluation we have less money to spend on each others jobs.

    CBC will not even let people comment on this story as after all, at CBC the government is to be statism worshiped as CBC wants its corporate welfare check.

    Which is really the problem, taxes were meant to be for common good, severs, water, fire, justice and education for COMMON good. But now, Ottawa spends over 50% of its budget on uncommon good, bailouts, inflated contracts, corporate wlefaire and leaves people with less money for each oters joibs.

    Jobs is from affordable exchange of desired goods and services. Devalue money 10 cents from par, you get 11% inflation and that means people pay more and get less. GDP doesn’t’ drive jobs, most of GDP is inflation driven, not goods and services driven, they are different metrics.

    Its why governments can’t solve the problems started with 2006 debt/fiat currency fraud, governmetns bloat and debt are the problems. Need to let interest rates go above real inflation or money will eventually become worthless. Needs to reward people who do it right, or everyone will become a dysfunctional debtor until the system collapses.

    We are a negative value tax inflated economy of debt and currency fraud. If we can’t stop this trend, we will be like Greece, Iceland, Spain and other bankrupt countries. Run by tax greed as repression, we have become economic slaves of corrupt state and no longer have the money value to spend on each others jobs, too busy supporting governemtn money for nothing bailouts.

    Less government is coming, just how it happens remains to be seen. As we are witnessing the fall of the corrupt western governments.

    • You seem to have more bad days than good. My sympathies.

      • Yes, he has a horrible life….yet he stays here for the bennies and lives to complain. LOL

  5. I expect a JT government would actually be quite a bit like Harper’s (both parties have moved towards each other over 20 years), but a little more fair, a little more balanced, a bit better for the average Canadian. I think Canadians are feeling their $ situation hasn’t improved that much unless they’re in a boomtown like Fort McMurray, this report echoes that and shows there’s room for improvement. Add that to a current government getting long in the tooth and with some ugly cheating in the proceduaral area, the Liberals look to have a strong strategic hand in 2015.

    • However the same old, trite liberal theme as heard under Cretin and Martin resurfaced at this week end’s shindig: Support us because we stand for Canadian values. Ergo, if you disagree with us, you obviously don’t reflect Canadian values. For me, this strikes pretty close to the ultimate arrogance, running second only to the notion that we can stop climate change.

      • Cons think Canadians share THEIR values. We do not.

        • Yes we do.

          • No, YOU do. The rest of us don’t.

          • LOL what an absurd statement. Who exactly is “The rest of us”? And how many of you are there?

          • It’s Monday morning and I don’t have time to play games

            6 out of 10 Canadians didn’t vote for Harper

          • This comment was deleted.

          • Actually Trudeau Sr is our most popular PM

            Now stop foaming and take a nap

          • I hated him and I am not alone

          • Maybe not, but you’re not a majority either.

          • and neither are you.

            EmilyOne… I am starting to think that you have “Someone is wrong on the Internet” syndrome. You should get out more and stop trolling.

          • Mmm I should stop criticizing your hero, right? Because you’re concerned for my health, right?

            Noop sorry.

            PS and you don’t know what ‘troll’ means either.

          • No Harper isn’t my hero. I don’t particularly like politicians, especially lame ass socialists like Justin.

            No I am not concerned for your health. But honestly, is this all you have to do all day? Troll new sites and whine about the current government? Go out for a walk… have coffee with friends… read a book… watch a good movie… anything other than worrying if someone is wrong on the internet.

          • Well you might not like them, but they determine much of your life, so you should know something about them

            For one thing Justin and the Libs aren’t socialists.

            As to me….I work online. All day, everyday….and I pop in here for information and amusement.

          • No EmilyOne “they” do not determine any of my life.

            I will admit that my definition of socialist is rather loose. Anyone that isn’t a libertarian like me is a socialist as far as I am concerned. Justin and his cohorts honestly feel that they would be better at spending yours, mine and everyone else’s wealth than we would be, and that they have the god given right to do so. Maybe that makes them mafiosi rather than socialists but I fail to see the difference between one thief and the next.

            But back to you, out of the 85 (now 86) comments on this obscure article 28 of them are yours. About 1/3 of the comments…. :-/

          • There’s even a govt tag on your mattress, luv

            And you can’t talk about govt if you’re going to re-define words. Sorry. This isn’t Humpty Dumpty.

            But then Libertarians are mooches

          • 29

          • You’re still a mooch

          • 30

          • A mooch with OCD at that. LOL

            It’s okay Ricksk…..there is no limit to the comments you can post. Feel free to do so

          • 31

          • 32 Dungeon. Adios.

          • Not only do you have “someone is wrong on the internet” syndrome but it seems you have “Last worditis” as well. Here is a simple experiment to prove it. No matter what my comment is, you will not be able to resist replying.


          • How many actually voted Lieberal last time?

          • Sybil.

  6. Maybe we in the middle class are

  7. Debt will be the death of the middle class. There is no saving a acquisitive society from the trappings of easy credit.

    • People have always had debt, and society is still around

      • Exactly the arguments made in the 2000-07 era, when a few American commentators started to fret over high mortgage and consumer debts. They too were dismissed by know-it-alls who knew better.

        • Debt didn’t cause the 2008 crash

          • You’re an economist, right?

          • Actually, she’s right. Debt did cause the 2008 crash. It would take an awfully dim wit to think otherwise. Oh wait…

          • If I start to get factual dyslexia like that, send out a team, OK?

      • BS the jews created credit, but could only charge interst to the infidels

          • ok, the jews perfected usury

          • Usury was forbidden to Christians….and Jews could only make a living doing things others didn’t like, or forbade… that’s how it happened.

            Did you expect they should loan out money for free?

  8. Maybe most of us in the middle class aren’t worried about this because we would rather spend time with people dear to us instead of doing all we can to earn more money to buy more “stuff” ready to sacrifice .

    • Oooh how noble and selfless of you!

  9. Maybe most of us in the middle class would rather focus our time and energy on people who are dear to us instead of doing all we can to earn more money to get more “stuff.” For too many of us it may be a non issue.

    • Yeah, poverty is always inviting.

      • Poverty is a relative term. Spend some time with 95 percent of our world’s population and get a perspective. We are rich, the one percent. So lets keep whining about how bad we in the middle class have it.

        • Of course we’re richer than Somalia…..but we don’t live in Somalia and there is no reason to match their standard of living. Impoverishing yourself won’t help them.

          The idea is to raise theirs, not lower ours.

          • the plan is to lower our standards and raise the 3rd world`s We will meet somewhere in the middle.

          • Why? Because we’ll run out of….stuff?

            No the idea is to have everyone prosperous.

          • sure it is, that`s why all the mnfctg jobs are leaving. We will run out of cheap oil, we will never run out of cheap labour

          • Manufacturing has left for China. It isn’t coming back.

          • how is that going to make everyone prosperous?

          • We leave factory manufacturing behind. 75% of our economy is service.

            There are already robot factories, and 3D will be in-home

          • I repeat— how is that going to make everyone prosperous?
            robots are made offsore

          • Are they? Why?

  10. Canada’s economy has been in dire straits ever since Bensonomics under Trudeau. But Gerald Ford with his Whip Inflation Now had similar policies, and then the 1973 oil embargo and price rise has sealed the fate of the world economy since then. Settling for less than a return of the world economy to the conditions of the last time it was working properly, the early 1960s, is not acceptable.

    • Canada has been among the world`s best economies for a while now

  11. Why is Chrystia Freeland taking a victory lap is she a bit touched in the head, your party while you were working away in AMERIKA destroying Canadian jobs was leading the way on the destruction of middle class Canada. Harper just got passed the torch of Corporate Supremacy from your “Liberal” party.

    A day after the election Chrystia Freeland will be hard at work back in New York destroying Canada.

  12. The conservatives are a corrupt bunch of elitist cronies and the liberals will sell their souls for a vote. Both parties are incompetent, waste billions in tax payer money, and neither party represents Canadian values. It says a lot about the sad state of this world when we have nothing better to choose from in CANADA. .

  13. Why those evil Cons…..Wait a minute who was in charge from 93 – 07 ?? The Libranos never mind nothing to see here move along………..

  14. “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.”

    Guess which pesky dept is next on the ole chopping block then…not withstanding the ministry spokesman hauling out the govt’s current tps?
    Middle class incomes have failed to keep up with inflation for at least 15 years prior to the 08 recession. We’re asked to believe that since then the Harper govt has kissed it all better. Yes they brought in some tax cuts – mostly in the form of dumb cut s to the gst, boutique tax credits aimed at the upper middle class CPC friendly families, and to be fair TFSAs and a much needed working income tax credit[ not aimed at the m/c] This seems to rather conveniently take swing only at the Chretien /Martin libs. Yet Martin pushed through what i’m pretty sure was the largest broad based income tax cut any govt in Ottawa at the time, or since. Yet still the m/c haven’t advanced. That govt also enacted reforms to UI that began under Mulroney and were certainly supported, even criticized as not being tough enough by Reform at the time.[ not excusing the Liberals. I’ve always thought the limiting of UI/EI was wrong headed and unjust]

    It’s just too coincidental the report only cover liberal so called inaction and stops short of addressing the Harper record after 08. I suspect any such report would show other than targeted CPC friendly tax credits the great bulk of m/c Canadians are still, at best standing still.
    No reason the JT Liberals shouldn’t be the ones to go back in and try to fix some of their Parties goofs. At least they’ll attempt to target more than just party friendly sectors of the country, or oil buds in Calgary, without sinking the national economy.

  15. What’s conveniently left out of the discussion here is the identity of the culprit- namely the overly rapid growth in public sector debt and costs. It doesn’t matter which branch of government you look at, you will find that their spending has ramped up at a rate that grossly exceeds inflation and population growth. That money has to come from somewhere, and it has been pilfered directly from the citizens least able to shield themselves from the ravenous maw of public sector greed.
    Sure, you can tax businesses more, but the vast majority of business is small business. Tax their profits more and you relieve them of the ability to finance growth, take advantage of new opportunities, weather downturns, and increase the pay of their employees. Stagnation results.
    You can tax the upper echelon, but that isn’t as lucrative as it might seem at first. In our little city, 9% (or more) of our workforce is in the top 5% of income earners, so that money will just make a magical u-turn at the next round of contracts. The bulk of our top 5% to top 1% are the aforementioned small business owners. In the end, almost all your tax effort there just ends up reducing your tax base in the long run.
    Then we have the outright lies and stupidity. We convinced millions of people to give up the demon tobacco, only to find out that those people were voluntarily contributing millions of dollars in unreplaced tax revenue. Now, those of us who never smoked in the first place, are being told that all those people who quit smoking to save ME money, are now not paying their unfair share of taxes, so I get to pay more taxes. Hullo? McFly?
    We could go on at length, but the solution is simple- cut government spending at all levels. Cut pay, cut benefits, and cut pensions. You want the 1 percenters to pay more? Let’s start with every one percenter collecting a federal, provincial, or municipal pay packet, and cut it HARD. Work your way down from there. Remember, every single person who works in government believes, at some level, a little stronger in the concept of “social justice’ than us wee profit mongers out here in taxpayer land. On that basis, let them make the initial sacrifice. Once you’ve trimmed the cost of every single level of government so much that you can’t find a single person in all of Canada willing to take a public sector job, give all of them a 5% raise. Then, and only then, do you make a trip back to the well for more.
    Every politician at every level needs to grasp that there is tremendous discontent among the 20 or 25% of us that pay over 80% of ALL taxes. We’re not prepared to earn less until we see governments and those who work in them get by on less, as well.
    Cut until it hurts, take an Advil, then cut some more.

  16. Truly, but then this IS the ‘new world order’ of the neo-cons isn’t it?

    There is the 1% and then… there is nothing else of consequence!

    If people wait much longer Canada’s voting will be as ‘fixed’ and the USA system.

    REMEMBER!!! Never let them put electronic voting in place, never!

    • You do know that it’s the Libs and NDP in this country crying loudest for electronic voting, don’t you?