Why is Canadian public opinion so pessimistic?

Since last year, Canada's economic performance has exceeded expectations, showing certain signs of recovery. Although the economy once stagnated, it seems to be moving towards a soft landing, with inflation slowing down and unemployment dropping to 5.7% in January 2024, close to pre pandemic levels. However, despite these positive economic indicators, recent surveys have shown that Canadian citizens are not satisfied with the direction of economic development. According to a survey, 84% of Canadians believe that the country has entered a recession, while 73% expect it to enter a recession next year. Especially young people, they are full of fear for the future, which has caused people to ponder deeply.

Firstly, in Canada, income and wealth inequality is intensifying at an alarming rate. The wealthiest 20% currently hold over two-thirds of their net assets, while the bottom 40% only hold 2.7% of their net assets. According to data from 2023, the highest 20% of the population accounted for 40.3% of disposable net income, while the lowest 20% of the population only accounted for 6.1%. At the same time, the number of low-income groups is constantly increasing.

Secondly, the burden of household debt is becoming increasingly heavy. Since the outbreak of the epidemic, except for the highest income group, everyone's net savings have been deteriorating because renters and low-income families often spend more on necessities than their income. Currently, Canada's household debt to disposable income ratio is the highest among the G7 countries. In the current high interest rate situation, the proportion of household interest payment burden to disposable income has recently reached its highest level in 12 years.

The soaring housing prices have exceeded the rate of income growth, and mortgage interest rates have risen significantly, leading to the housing affordability index dropping to its lowest level in the past 40 years. For many people, the dream of owning their own housing seems more distant than ever before. The competitiveness of Canada's most concentrated industries is declining, while the number of highly concentrated industries is increasing. The profit margin and markup of already profitable companies are increasing.

The increasing concentration of enterprises is also one of the problems. This trend has reduced the vitality of the industry, leading to reduced choices and rising costs, thereby having a negative impact on consumers and the wider society. At present, this situation has occurred in the grocery industry, where the lack of competition has led to an increase in food prices. This is also why Canada's airfare and mobile phone bills are still higher than those of similar countries.

Young people feel panic about the future. University education has always been regarded as a "great equalizer" and a tool for intergenerational social mobility, but this may no longer be the case when government support for higher education continues to decline. The financial situation of many universities is becoming increasingly unstable, which means that higher education institutions may eventually increase tuition fees or rely more on international students to meet their budgets, both of which will affect domestic students. Students from the bottom of the economy will increasingly find it difficult to exchange their high school job security for the high cost of obtaining a university or college degree. Conversely, this will reduce their promotion opportunities on the socio-economic ladder.

Compared to previous generations, young people across North America are more anxious about their future, more concerned about their mental health and educational prospects, and more disillusioned with politicians. They feel pessimistic about the world and future around them, and worry about their financial security, as well as high rental and grocery costs.

In short, currently in Canada, economic difficulties and other factors seriously affect people's daily lives and happiness. The cost of most items increases, and the cost of debt repayment also increases, which makes more people pessimistic about debt repayment, maintaining balance of income and expenditure, and overall financial prospects. However, when facing economic difficulties, a series of measures can be taken to alleviate economic pressure, some of which include optimizing budgets, finding part-time jobs, applying for bank loans, and learning new skills and knowledge. It remains to be seen what measures Canada needs to take to overcome this difficult period.