Canada's middle class is fading away

In a sneak preview of the next federal budget, Finance Minister Chrystia Freeland frames it as a “plan to unlock pathways to the middle class for the next generation.”

It's much more lukewarm rhetoric than the way the Liberals have typically referred to the middle class — and it may reflect the fact that the demographic has not been doing all that well under the Justin Trudeau government.

In a 2021 Organization for Economic Co-operation and Development profile of the Canadian economy, one of the authors' main take-aways was that Canada was losing its middle class relative to the rest of the developed world. Canada's share of middle income earners “has shrunk more than most others since the mid-1980s,” it wrote.

This added to prior OECD data — first published in 2019 — finding that Canadian millennials were failing to join the middle class at the rates enjoyed by their baby boomer parents.

Among Canadian boomers, 67 per cent of them were in the middle class by the time they reached their 20s, compared with 59 per cent of millennials.

Canada was also found to have a weaker middle class than the rest of the developed world. The number of Canadians living in a “middle income” household was 58 per cent, compared with an OECD average of 61. Meanwhile, Canada had outsized rates of those considered “poor” (14 per cent versus 11 per cent).

At the time, OECD analysts called it a “bleak picture” of the future. It's part of why polls show that middle class Canadians are increasingly worried their days of earning a “middle income” may be numbered.

In December, a class identity poll by Pollara Strategic Insights found that less than a third (31 per cent) of respondents were optimistic about the future of the Canadian middle class.

At the time of Pollara's last class identity poll in 2020, 79 per cent of respondents had expressed confidence their children could reach the middle class through “hard work.” Just three years later, only 52 per cent still believed it. These are all awkward figures for a government that has often placed the words “middle class” at the centre of its messaging.

The signature promise of the Liberals' 2015 platform was “growth for the middle class.” Even a promise to increase infrastructure spending was framed as a way of bringing “economic security to the middle class.”

Four years later, “middle class” featured in the title of the Liberal party platform going into the 2019 election: Forward — A Real Plan for the Middle Class.

The platform's first chapter was called Building a Strong Middle Class, with Chapter 2 entitled Investing in Good, Middle Class Jobs.

In sharp contrast to Freeland's recent statement that middle class status might be obtainable “for the next generation,” the Liberal line in 2019 was to reference “the middle class and people working hard to join it.”

In House of Commons statements since 2015, the Liberals have also used the term “middle class” more than all other parties combined. Over the last nine years, a Liberal MP has uttered the words “middle class” 5,416 times, with the plurality belonging to Trudeau himself, with 619 utterances. This is against just 1,592 mentions of “middle class” by the Conservatives, and 682 by the NDP.

The shrinking of the middle class is but one symptom of the fact that Canada is generally becoming poorer as compared with its peers.

Canadian per-capita gross domestic product has been trending downward for nearly four decades; a trend that has accelerated under Trudeau. Adjusting for inflation, each Canadian's share of GDP is actually lower than it was in 2014.

In a recent analysis of the phenomenon, Globe and Mail columnist Andrew Coyne noted that Canada was proportionally the sixth richest country in the world as recently as 1981.

According to the most recent figures from the OECD, Canada is now in 15th place. And with the OECD projecting Canada to show the lowest productivity growth of any other country in the developed world, that ranking is likely to slip still further.