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Canada Needs to Lower Poverty and Income Inequality to Boost Social Performance Relative to Peer Countries

by User Not Found | Apr 05, 2017
Canada is a “B” performer on The Conference Board of Canada’s society report card, but poor rankings relative to peer countries on income inequality and poverty highlight the scope for improvement. Canada places 10th overall in the first How Canada Performs: Society report card, that compares the social performance of Canada, the provinces, and 15 peer countries.

Most provinces score “B” grades on social performance.

Ottawa, April 5, 2017—Canada is a “B” performer on The Conference Board of Canada’s society report card, but poor rankings relative to peer countries on income inequality and poverty highlight the scope for improvement. Canada places 10th overall in the first How Canada Performs: Society report card, that compares the social performance of Canada, the provinces, and 15 peer countries.

chart with grades for Canada and the provinces on society report card

“The unexpected results of the Brexit vote and the election of Donald Trump have brought to light the political and social unrest that can come when voters are frustrated with their social outcomes. Both the U.K. and the U.S. are among the worst-ranked on income inequality in our report card,” said Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada. “While both countries have much higher income inequality than Canada, it is still important that Canada looks for ways to reduce income inequality and poverty. Sustained weak outcomes on income mean people are not fulfilling their potential and this can diminish economic growth and lead to increased social tension. A constructive approach is to remove barriers to opportunity for low and middle income Canadians.”

“Also, it is important to keep in mind that Canada does well when it comes to intergenerational income mobility. Canada has much higher income mobility compared to the U.S. and the U.K., both of which have the lowest intergenerational income mobility among the peer countries,” added Alexander.

Highlights

  • Canada gets a “B” overall and ranks 10th among the 16 peer countries.
  • On income inequality, Canada ranks 13th out of the 16 countries.
  • Canada has the fourth-highest poverty rate among its peers.
  • Half of the provinces score “B” grades and are middle-of-the-pack performers on the How Canada Performs: Society report card. New Brunswick is the top-ranked province placing 10th among 26 jurisdictions.

Ten indicators were used to evaluate the overall social performance of Canada and 15 peer countries. Canada is a middle-of-the-pack performer on most of the indicators—it gets two “A”s, five “B”s, and three “C”s. The indicators cover performance in two broad categories: equity and social cohesion.

While Canada scores a “B” on income inequality, it places a not-so-impressive 13th among the 16 peers on this measure. Income inequality (as measured by the Gini coefficient) in the country has risen since the late 1970s before stabilizing in the early 2000s. The income received by the richest Canadians is nine times higher than the share going to the poorest. Denmark, Finland, Belgium, and Norway remain the countries with the lowest income inequality, while the U.S. has the highest.

With the fourth-highest poverty rate among its peers, Canada gets a “C” on this measure and ranks 13th—only the U.S., Japan and Australia fare worse. And, while total population poverty in Canada has remained more or less stable for the past few decades, the elderly poverty rate is edging upwards. Furthermore, the country has the second-highest child poverty rate after the United States, although this assessment is based on data prior to the implementation of expanded child benefits in the 2016 federal budget that will likely improve Canada’s performance.

Canada is also a “C” performer on the gender wage gap indicator, with a 13th place finish among the 16 peer countries. The wage gap between the weekly median earnings of men and women in Canada is more than 18 per cent.

While comparable international data are not available for other indicators of equity— immigrant and racial wage gaps and the income of disabled people—data for Canada reveal that the country must do better on these fronts as well. In Canada, university-educated Canadian-born visible minorities earn on average $0.87 for every dollar earned by Caucasian Canadians. Meanwhile, the hourly wages of university-educated landed immigrants living in Canada are on average one-fifth lower than Canadian-born citizens. The income of people with disabilities in Canada is 73 per cent that of people without disabilities.

Canada’s standout performance is on the life satisfaction indicator, where it gets an “A” and ranks 4th among its peers. The country also saw an improvement on the burglaries indicator and receives an “A.” Canada’s burglary rate has dropped significantly over the past 15 years. Canada gets “B”s on a number of other indicators of social cohesion: jobless youth, homicides, social network support and suicides.

Canada also gets a “C” grade relative to its peer countries on voter turnout. Voter turnout has decreased overall over the past 40 years; however, there was a notable increase in the 2015 federal election.

For the first time, this year’s How Canada Performs: Society report card includes the provinces in the rankings. Compared to international peers, most of Canada’s provinces score “B” grades overall.

In this year’s society performance analysis, 16 peer countries were assessed, and their corresponding grades are:

  • “A”—Norway, Denmark, Sweden
  • “B”—Netherlands, Finland, Germany, Switzerland, Australia, Austria, Canada, Belgium, U.K., Ireland
  • “C”—France
  • “D”—Japan, United States

How Canada Performs is an ongoing research program at The Conference Board of Canada to help leaders identify relative strengths and weaknesses in Canada’s socio-economic performance. Six performance domains are assessed: Economy, Education and Skills, Innovation, Environment, Health, and Society.

Explore the results of the How Canada Performs: Society report card in-depth during a live webinar on April 19, 2017, at 2 p.m. EDT.


For more information contact

Corporate Communications
613-526-3280
corpcomm@conferenceboard.ca


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