Research on the state of the economy
2022
Executive
Summary
Prepared
for Finance Canada
Supplier Name: Environics Research
Contract Number: 60074-211395/001/CY
Contract Value: $174,502.80 (including HST)
Award
Date: 2021-12-15
Delivery
Date: 2022-04-08
Registration Number: POR 068-21
For more information on this report,
please contact Finance Canada at: por-rop@fin.gc.ca
Ce résumé est aussi disponible en Français
Research on the state of the economy 2022 – Executive Summary
Prepared for Finance Canada by Environics Research
April 2022
This publication may be reproduced for
non-commercial purposes only. Prior written permission must be obtained from
Finance Canada. For more information on this report, please contact Finance
Canada at: por-rop@fin.gc.ca
© Her Majesty the Queen in Right of Canada, as represented by the Minister of Finance Canada, 2022.
Cat. No. F2-289/2022E-PDF
ISBN 978-0-660-42766-9
Cette
publication est aussi disponible en français sous le titre Recherche
en ce qui concerne l'état de l'économie 2022 – Résumé
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ISBN 978-0-660-42769-0
Finance Canada commissioned Environics Research Group to conduct qualitative and quantitative public opinion research among Canadians in the winter of 2022. The primary objective of the research was to explore current attitudes among Canadians toward such topics as:
· The state of the Canadian economy and Canadians’ standard of living;
· The tax system and incentives;
· Housing affordability; and
· Various fiscal issues.
The research objectives are to explore Canadians’ overall concerns and perceptions about the current state of the Canadian economy and emerging issues, and their expectations about the role of the Government of Canada in the economy and in other measure intended to improve quality of life for Canadians.
Environics Research conducted a series of 10 online focus groups in February 2022 to assess Canadians’ attitudes toward the current state of the economy, with a particular focus on attitudes toward such issues as inflation, housing, the deficit and priorities for the next federal budget. The online focus groups were conducted using the Zoom platform; and a pair of sessions were conducted in each of the following regions: Ontario (Feb. 7), Atlantic Canada (Feb. 8), Prairies (Feb. 9), B.C. (Feb. 10) and Quebec (Feb. 15). The two Quebec sessions were conducted in French and the other eight sessions were conducted in English.
Location (Language of groups) |
Date |
Time |
Ontario (English) |
Monday, February 7 |
5pm EST – Group #1 |
Atlantic provinces (NL, NS, NB, PEI) (English) |
Tuesday, February 8 |
4pm EST (5pm AST)– Group #3 |
Prairie provinces (MB, SK, AB) (English) |
Wednesday, February 9 |
6pm EST (5pm CST/4pm MST) – Group #5 |
B.C./Territories (English) |
Thursday, February 10 |
7pm EST (4pm PST) – Group #7 |
Quebec (French) |
Tuesday, February 15 |
5pm EST – Group #9 |
NB: Participants in groups 1, 3, 5, 7 and 9 were lower-income. Participants
in groups 2, 4, 6, 8 and 10 were higher-income.
Participants were 18 years of age or over, and included range of age, education and backgrounds. The groups lasted approximately 90 minutes, and consisted of between six and eight participants (out of 8 people recruited for each group). Participants were provided a $100 honorarium to encourage participation and thank them for their time commitment. Each evening one session was conducted with Canadians with lower incomes and one session was conducted with those with higher incomes.
Statement of
limitations: Qualitative research provides
insight into the range of opinions held within a population, rather than the
weights of the opinions held, as would be measured in a quantitative study. The
results of this type of research should be viewed as indicative rather than
projectable to the population.
Finance Canada wished to move this research to an
online methodology. As a result, Environics conducted a mixed mode survey, to
assist in this transition:
· The main methodology for the general population sample was an online survey with a representative sample of 2,007 adult Canadians, conducted from February 23 to March 4, 2022. As the online survey uses an opt-in panel, this is a non-probability sample and no margin of sampling error is calculated.
· A random-probability telephone survey with 1,003 adult residents of Canada, from February 19 to March 18, 2022, using industry-standard random-digit dialling (RDD) techniques. A survey of this size will yield results which can be considered accurate to within +/- 3.1 percentage points, 19 times out of 20. Margins of error are larger for subgroups of the population.
The sample was stratified by region to allow for meaningful coverage of lower population areas:
Total |
Online |
Telephone |
Telephone
sample margin of error* |
|
Atlantic Canada (7%) |
301 |
200 |
101 |
+/- 9.7 |
Quebec (23%) |
750 |
500 |
250 |
+/- 6.2 |
Ontario (38%) |
902 |
600 |
302 |
+/- 5.6 |
Prairies/NWT/Nunavut (19%) |
604 |
404 |
200 |
+/- 6.9 |
B.C./Yukon (13%) |
453 |
303 |
150 |
+/- 8.0 |
CANADA (100%) |
3,010 |
2,007 |
1,003 |
+/-3.1 |
*
In percentage points, at the 95% confidence level
The contract value was $174,502.80 (HST included).
This report begins with an executive summary outlining key findings and conclusions, followed by a detailed analysis of the focus group findings and a detailed analysis of the survey data. Provided under a separate cover is a detailed set of “banner tables” presenting the results for all questions by population segments as defined by region and demographics. These tables are referenced by the survey question in the detailed analysis.
In this report, quantitative results are expressed as percentages unless otherwise noted. Results may not add to 100% due to rounding or multiple responses. Net results cited in the text may not exactly match individual results shown in the tables due to rounding.
Use of findings of the research. By gauging and analyzing the opinions of Canadians, the Government of Canada gains insights into important policy areas related to the mandate of the department and related services. The information gained through this public opinion research will be shared throughout Finance Canada to assist it when establishing priorities, developing policies, and planning programs and services.
Participants expressed pessimism and
concern about the Canadian economy. When asked to provide one word to describe
the state of the Canadian economy, the words used tended to convey these
sentiments of uncertainty and pessimism, and included “poor”, “scary”,
“unstable”, “volatile”, “inflation”, “challenging,” “struggling” and “high
prices.” Only a few people used more positive or neutral words such as “OK” or
“average.”
Overall attitudes toward the state of the
economy were quite consistent by region and income level, though lower-income
participants were clearly feeling more personally vulnerable. Some with higher
incomes noted that Canada was still prosperous by global standards. It was also
frequently noted that the economy was very uneven and unequal, and that during
the pandemic many people and companies had become much richer while others had
been hard hit.
Most were also pessimistic about the
coming year. They expected prices to keep rising. They also expressed worries
about the pandemic bills coming due, and future instability from supply chain
interruptions and possible new variants. It was noted that we are still in
“uncharted territory”. A minority were more optimistic, and
drew more of a direct line between the imminent lifting of pandemic
restrictions and an economic recovery.
The main economic issue of concern was
clearly inflation and rising prices. Participants consistently referred to
rising grocery and gasoline prices and, in many cases, also mentioned housing
and utility bills. It was noted that wages have not kept up with rising prices,
and that life was becoming less and less affordable.
The inflation rate has become the main
indicator for how the economy is doing. Some fear it could get worse before it
gets better due to an explosion of pent-up demand once restrictions are lifted.
Shortages of goods came up on occasion, more in the context of the need for
Canada to be more self-sufficient. People are now more aware of the vulnerabilities
of global supply chains. Many also expressed concerns about all the small
businesses that had disappeared during the pandemic, or that were now
struggling.
Some concerns were also expressed about
the post-pandemic economic “hangover” when “the bills come in,” and that there
would be consequences, such as higher taxes and/or higher interest rates, and
service cuts.
There was little concern expressed about
unemployment. Instead, there were concerns about labour shortages. A few
participants were under the impression that programs such as CERB were making
people reluctant to re-join the workforce; others noted that too many jobs
still pay low wages and offer poor working conditions, and
are therefore not attractive to people.
Participants reported varied economic
experiences with the pandemic. Some, especially in the lower-income sessions,
spoke of having lost their jobs or having suffered a loss of revenue. Those who
had worked in travel, hospitality, retail or personal
care-type jobs were especially hard hit, though most reported having found ways
to “reinvent themselves” into new jobs.
Several people in each session reported
that they had taken advantage of programs such as CERB – particularly in the
early days of the pandemic. This was appreciated, though it was noted that they
still suffered financial losses, and that the payments did not compensate for
the loss of income.
In contrast, many participants –
especially those with higher incomes – reported that they felt financially
better off during the pandemic. Those with stable jobs described being busier
than ever and having saved money because they were not spending as much on
things like travel, eating out, clothes, etc.
Participants had a hard time describing a
“post-pandemic economy”. Some mentioned that our shopping and working habits
have likely changed forever and moved online. Others mentioned how it could
take many years to recover from all the pandemic-related spending that was
required and all the businesses that were wiped out. Others were more confident
of a post-pandemic boom, as people would start to consume again.
Many participants expressed sentiments
that the pandemic had shown them what was essential and what was not, and how
we could all adapt. Many also felt that the pandemic had raised awareness of
the vulnerability of global supply chains, and the need for more food and
energy self-sufficiency.
As noted, rising prices and inflation were,
by far, the biggest top-of-mind economic concern. The recent increases in
prices were seen to be very noticeable – particularly with regard to groceries
and filling up cars with gas. In B.C., rising insurance premiums were also
mentioned, particularly in the wake of natural disasters in the past year.
Many participants, especially those with
lower incomes, worried about not being able to keep up with the increases in
costs of necessities. One person noted “there is nothing at Dollarama that
sells for a dollar anymore”. But people reported that they found ways to manage
– they eat at home more, they look for sales, they buy cheaper products, they
drive less, etc.
Inflation was seen very much as a global
issue, and not as a “made-in-Canada” issue. Most understood that inflation was
happening in many other countries. People were unclear and confused about the
causes of the recent inflation. Some pointed to pandemic-related supply chain
disruptions, the sudden increase in demand for products as restrictions were
lifted, rising costs for retailers due to COVID-related retrofitting and higher
wages, and too much money being pumped into the economy. Some also suspected
that price gouging was going on.
Few participants had any specific ideas on
what the federal government could do to address inflation. Some suggested
cutting spending, cutting CERB (which many believe still exists), building more
domestic capacity to produce staples, or price controls on essentials.
There were some spontaneous mentions that
interest rates would likely go up in response to inflation, though most did not
understand how this would actually reduce prices. Many had concerns that higher
interest rates could crash the economy or cause a sudden housing bubble
collapse – even if most people would not be personally affected by a small rate
increase.
Housing-related concerns were raised
consistently in all regions, though the nature of the concerns varied by income
group. Those with lower incomes tended to focus on immediate issues around housing
affordability, such as being able to afford rent, being able to afford to live
anywhere if forced to move, and feeling priced out of
their community.
Those with higher incomes often already
owned their homes, so their anxieties tended to focus more on whether their
children would ever be able to afford to live anywhere – either as an owner or
renter. Some also worried about where they might live when they retired and
wanted to downsize.
There was an overarching concern in all
sessions that affordable housing was now in very short supply. Participants
from smaller communities in Ontario, Atlantic Canada and, to lesser extent, in
the Prairies sometimes expressed shock at how quickly and suddenly housing had
become unaffordable in their communities.
There was little clarity on what had
caused the current housing crisis. Some mentioned the impact of speculators,
low interest rates, immigration and zoning laws that make it difficult to
increase the supply of affordable housing. Some also noted how every aspect of
housing had increased in cost during the pandemic, from the
cost of labour, to the cost of building materials such as lumber.
Awareness of any current federal
government measures to address housing issues was very low. There was some
vague awareness of money for first-time home buyers, and some mentioned
provincial government measures taxing foreign-owned vacant units.
When shown a list of 12 housing-related
measures that were being considered by the federal government, most people felt
that it seemed like a step in the right direction. However, many participants
were quite cynical about whether there was much that governments could do that
would make a real difference with regard to affordable housing.
The measures that participants tended to
see as being most effective were those that addressed the lack of supply, such
as “increasing the availability of affordable housing” and “requiring
developers to ensure that at least 20% of new housing is affordable.”
The two measures that addressed vacant foreign-owned
properties also resonated with some people, though less so in B.C., where
similar provincial policies are already in place and where housing remains
unaffordable. There was also interest in making real estate transactions more
transparent and ending blind bidding.
Few had any objection to any of the
measures, but some were found to be very narrow or addressed issues that were
not well-known, such as a ban on “renovictions” or taxing REITs. Some also
pointed out that demand-side measures giving more money to home buyers or
making mortgages more affordable would not solve the problem of lack of supply.
Participants were aware that there is
currently a large deficit at the federal level, but there was little sense of urgency
about it. Many saw it as “just a number” and as an abstraction. Most also felt
the deficit was a natural result of the pandemic and all the spending that was
required to deal with it. They did not expect the budget to be balanced anytime
soon.
There were concerns that trying to deal
too aggressively with the deficit would mean major tax increases and/or service
cuts. To the extent that participants had suggestions for how to reduce the
deficit, they centred on the government going after tax havens and tax evasion
by the super-rich, or on having some plan to reduce “unnecessary” spending.
There were nonetheless concerns about
leaving a large debt to future generations. Participants expressed a desire to
see some sort of a plan or road map to deal with the debt. Some expressed
concerns that the federal government seemed oblivious to the deficit and the
growing debt.
Attitudes were mixed about more permanent
long-term funding to the provinces for health care, that would add to the
deficit. In some areas, such as the Prairie provinces, there were concerns that
provincial governments could not be trusted to spend the money on health care.
In Quebec and B.C., people were more receptive to more federal funding of
health care, whatever the fiscal impact.
There was little consensus on what
participants wanted to see included in the next federal budget or on what
advice they would give to the Minister of Finance.
The most common specific suggestions
included: health care funding (including mental health, dental care,
pharmacare), addressing the housing crisis, addressing the cost of living, the
environment and green infrastructure innovations, supports for seniors,
supports for the most vulnerable (such as young families, seniors, the poor), supports
for small businesses damaged by the pandemic, and cutting the GST.
When prompted about mental health, many
participants acknowledged that this was now a major issue and an area that
needed new investments.
Finance Canada
plans to transition this research to an online methodology. As a result, the
following sections report the online survey findings. In the full report, Chapter
II Section F provides tracking information based on the telephone survey
results, and Chapter II Section G discusses modal differences in response
between the online and telephone methodologies.
When rating the current state of the Canadian economy, just over one-quarter (27%) say it is good (score of 7 to 10), over three in ten (34%) are neutral (score of 5 or 6), and close to four in in ten (38%) say it is bad (score of 1 to 4).
Minorities of Canadians in all regions rate their provincial economy positively; pluralities in most locations rate it as negative, with the exceptions of B.C., which is the most positive at just under four in ten; Quebec, which is divided between rating their provincial economy as negative or neutral; and Ontario, where the response is more neutral. Close of half of Atlantic Canadians rate their province’s economy as negative.
Seven in ten Canadians (69%) have a
negative perception of the current cost of groceries. Only one in seven (14%)
are positive to some extent.
The rising cost of living is the most stressful of several
potential sources of stress rated (42% say it is a major source of stress).
Just under one-quarter each say having enough money to retire (23%) or being financially secure in
retirement (23%) are major stressors. Around two in ten
feel each of four things are a major source of stress: the quality of the
healthcare system (20%), the middle class falling further behind the top one
percent (18%), the spread of COVID-19 in Canada (18%) and saving enough money
to buy a home (18%).
Three in ten
(31%) indicate inflation/rising prices/cost of living is the most concerning
economic issue. Housing is a distant second, at just under one in ten (8%).
Seven in ten (72%) Canadians believe
the actions of the federal government can have a significant impact on the
state of the country’s economy; two in ten (18%) think it has little influence
in the face of global forces.
When asked to rate the importance of
eight issues for the federal government to consider when making budget
decisions, the most important are making the
cost of living more affordable (84%) and bringing inflation under control
(80%), followed quite closely by ensuring the wealthiest Canadians pay their
fair share (78%) and making housing more affordable (77%).
Over four in ten (43%) Canadians give a positive rating (score
of 7-10) to their own personal financial situation; three in ten (29%) give a
neutral rating, and one-quarter (26%) are negative to some extent.
Compared to their parents’ generation at the same age, Canadians
rate their generation as worse off when it comes to housing (62%), quality of
the environment (60%), financial security (48%) and mental health (48%). They
are more divided about whether things are better or worse when it comes to
employment opportunities or health. Close to half (47%) feel educational
opportunities are better than for their parents.
One-third (34%) of Canadians are
extremely or somewhat worried about personal or family job loss.
Regarding the effects of the pandemic, close to three in ten (28%) had to adapt to a remote work situation, including working from home, two in ten (22%) suffered a loss of hours or wages; and around one in ten each report temporary (12%) or permanent (9%) job loss, or being unable to work due to a COVID-19 diagnosis (10%).
Majorities agree (score 7 to 10) with each statement about the
federal government’s approach to fiscal issues, but agreement is highest that the
federal government should have a plan to gradually reduce the national debt
(75%), and lowest that the federal government should return to a balanced
budget as soon as possible (59%). Over six in ten agree to some extent with
other statements. Although it is clear Canadians want the government to balance
the budget, they largely prefer a cautious approach that does not require major
cuts to services or higher taxes.
Six in ten (60%) feel low-income earners should be paying less
tax. About half of Canadians think small businesses (49%) and middle-income
earners (50%) pay the right amount of tax; and around one-third each think they
could be paying less. In contrast, majorities think big corporations (70%), the
top one percent of income earners (69%), and financial (59%) and digital
corporations (58%), should be paying more in tax.
Responding to a number of statements regarding home ownership, eight in
ten Canadians (81%) agree (score 7 to 10) it is very difficult for people to
buy a house in the current economic climate, and seven in ten (72%) agree the
federal government has a responsibility to address the lack of affordable
housing in the country. There is only minority agreement (28%) it would be easy to find somewhere to live
that is both affordable and in a safe neighbourhood.
Three-quarters (76%) of homeowners
agree it was extremely important they own a home, and just over half (54%) agree
the cost of living in their home is affordable. Half of renters (49%) agree it
is extremely important they be able to own a home in the future, and four in
ten (39%) agree the rent they pay is affordable.
At least six in ten Canadians place at least some priority for the
federal government’s approach to each of 13 housing-related issues. The top
priority is increasing the availability of affordable housing (76%). Seven in
ten feel each of six other housing proposals are priorities: cracking
down on large landlords buying up housing (72%), continued incentives for
first-time home buyers (71%), increasing
transparency in real estate transactions (71%), making mortgage payments more
affordable (70%), requiring developers to ensure at least 20 percent of new
housing is affordable (70%), and making down-payments more possible for people
(69%).
I hereby certify as senior officer of Environics that the deliverables fully comply with the Government of Canada political neutrality requirements outlined in the Communications Policy of the Government of Canada, and Procedures for Planning and Contracting Public Opinion Research. Specifically, the deliverables do not include information on electoral voting intentions, political party preferences, standings with the electorate, or ratings of the performance of a political party or its leaders.
Derek Leebosh
Vice President,
Public Affairs
Environics
Research Group
(416) 820-1963
Supplier name: Environics Research Group
PWGSC contract number: 60074-211395/001/CY
Original contract date: 2021-12-15
For more information, contact Finance Canada at por-rop@fin.gc.ca