The Recession Blues

Canadians are united in concern over employment and taxes

ROSS LAVER January 6 1992

The Recession Blues

Canadians are united in concern over employment and taxes

ROSS LAVER January 6 1992

The Recession Blues

Canadians are united in concern over employment and taxes

In the world of economics, perception has a nasty habit of becoming reality. If enough people believe that conditions are going to get worse, spending by consumers starts to decline and company executives shelve plans to increase production and hire more workers. With that, the economy takes a nosedive. And the results of the eighth annual Maclean’s/Decima poll appear to offer little reason for optimism about Canada’s economic prospects in 1992. According to Statistics Canada, the country’s economy shrank by about 2.8 per cent between April, 1990, and March, 1991, but has been expanding gradually since. In spite of that, only nine per cent of those interviewed for the poll said that they believed the economy was improving, while 35 per cent detected no change. By contrast, fully 55 per cent of those polled said that the economy actually seemed to be getting worse.

The responses to several other questions provide further evidence of the current widespread mood of pessimism among Canadians. Indeed, anxiety about the economy far outweighed concern over national unity and Canada’s political future. The percentage of people who said that they are dissatisfied with their present economic situation now is at its highest level in eight years of the Maclean ’s/Decima poll—

36 per cent, compared with 31 per cent in 1990 and a mere 16 per cent in 1988, its lowest point. Similarly, 29 per cent said that they were either “pessimistic” or “very pessimistic” about their future economic prospects.

That compared with 26 per cent a year earlier and 13 per cent in 1988.

The gloomy mood was also reflected in the emphasis that respondents placed on economic issues. Asked to identify the country’s top problem, 18 per cent cited unemployment—twice as many as in 1990. Together with closely related economic issues cited by respondents, that total rose to 42 per cent. In all, including the 10 per cent of respondents who cited taxes and those who referred to similar problems, more than half of the poll respondents named an economic issue of one sort or another as the country’s top problem—far more than the 13 per cent who singled out

national unity as the nation’s principal concern.

Although widespread concern for the economy’s poor health was evident in every province, there were significant regional differences in the emphasis that respondents put on specific economic and financial issues. Thirtysix per cent of Atlantic Canadians said that

AASSESSING THE SSHM Is the economy improving? Getting worse? National 1989 1990 1991 Getting worse 58 90 55 Not changing 24 35 Improving 17 9

unemployment was the top problem, compared with 20 per cent of Quebecers, 17 per cent of Ontarians, 16 per cent of British Columbians and only 11 per cent of respondents in the three Prairie provinces. The proportion of poll respondents who cited taxes as the top problem, meanwhile, ranged from 15 per cent in Ontario to six per cent in each of Quebec,

Saskatchewan, Alberta and British Columbia.

British Columbians stood out as being among the most contented Canadians. Fourteen per cent of the respondents in that province said that they were “very satisfied” with their personal economic situations, roughly twice the national average. In addition, only 19 per cent of British Columbians said that they were pessimistic about their future economic prospects; in Ontario and Quebec, the rates were 30 and 33 per cent, respectively.

The survey also offered insights into the moods of different age, income and education groups. Respondents aged 65 and older were significantly more satisfied with their economic situation than other Canadians. Students and those with university educations also reported levels of contentment that were higher than the national average. Similarly, respondents with university educations and those still in school were more likely to express optimism about their future economic prospects. Among the least satisfied and least optimistic were high-school dropouts and those earning less than $20,000 a year. Twenty-one per cent of high-school dropouts named unemployment as the most pressing national problem.

Overall, the results of the poll suggested that Canadians have little faith in the economy’s ability to stage a sustained recovery at any time in the near future. If there is a glimmer of hope in the findings, it is that the national mood does not appear to be as bleak as it was a year ago, when 90 per cent of those polled said that they believed the country was heading into a period of recession. But with a clear majority of respondents in this year’s survey offering the view that the economy seems to be getting even worse, the likelihood that consumers will reach into their pockets and embark on a spending spree early in 1992 appears remote at best. As the new year begins, far too many Canadians are worried about keeping their jobs and paying their debts to be comforted by the statistics that may indicate that conditions are improving slowly.

ROSS LAVER