In a world of ever increasing political division in which those on the ‘right’ side of the spectrum are forever vilified for cutting social programs and making tough choices to balance budgets, it was quite refreshing to see that under a Conservative federal government in Canada, the poor became much less so.
Quartz research released a study of Statistics Canada data titled “The American dream still exists—in Canada”. It showed that between 2013 and 2016 poorest 20% grew TWICE as fast as Canada’s richest 20%. Canada poorest had their incomes move up a staggering 24% in just 4 years.
As with all studies, the start and end date are critical as you can make numbers say what you want if you control the variables. In this case it is true that in 2013 (the studies start date) Canada’s oil sector was booming and Alberta, Saskatchewan and British Columbia had their skilled labour and office workers alike raking in money faster than they could spend it. In 2014 the bottom fell out of the oil & gas business leaving absolute devastation in those Provinces through 2016 (the end date of this study). Many of middle and upper income earners in Western Canada were left with massive cuts to pay and benefits. In my case, I took a 25% pay cut to keep my job and I felt lucky because so many companies and colleges were forced out of the industry and out of work completely.
That boom at the start and bust at the end will affect a National average for upper income earners. However, regardless of how much richer Canada’s rich have become, it is undeniable that Canada’s poor have become much better off.
The colapse of the oil & gas sector not only hurt the rich, it helped the poor. When petroleum products (natural gas, home heating oil, propane, gasoline, diesel, jet fuel, plastics…) have a significant drop in price that ‘savings’ is most notable to the poorest. This is simple math. If you save $500 annual savings on petroleum products and you make $100K per year, that is just 0.5% to you. If you make just $25K/year, that same $500 savings is 2% of your income.
It is also worth noting that a ‘Liberal’ Government was elected in late 2015, but changes made at the Federal level have little effect on the ground for a year or more, so we decided to give this one to ‘Conservatives’ under then Prime Minister Harper. You can argue that if you wish but we believe it will stand up to empirical analysis.