Canada Income Inequality: StatsCan Cuts Will Harm Ability To Understand Wage Gap, Observers Fear

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STATSCAN CUTS INCOME INEQUALITY
Just as Canadians are expressing concern about the country’s income gap in seemingly unprecedented numbers, our ability to find out what’s happening with incomes is about to take a serious hit. (Alamy photo) | Alamy

Just as Canadians are expressing concern about the country’s income gap in seemingly unprecedented numbers, our ability to find out what’s happening with incomes is about to take a serious hit.

In announcing last week that Canadians’ wages have been stagnating since the financial crisis of 2008, Statistics Canada added a little note declaring that it’s discontinuing its Survey of Labour Income Dynamics.

The decision is evidently part of the fallout of the Harper government’s cuts to federal spending, and it has frustrated many economists and politicians who see in the cuts a continuing assault on StatsCan, and as a consequence, on the ability to get useful, up-to-date information on the welfare of Canadians.

PHOTOS: 10 AMAZING FACTS ABOUT INCOME INEQUALITY

The Survey of Labour Income Dynamics has been crucial to research on income inequality, because unlike the workaday surveys StatsCan conducts, the SLID tracks changes in income over time. It was the principal data source for StatsCan's own research into income inequality.

“At the heart of the survey's objectives is the understanding of the economic well-being of Canadians: what economic shifts do individuals and families live through, and how does it vary with changes in their paid work, family make-up, receipt of government transfers or other factors?” StatsCan says in its description of the SLID.

(A number of the articles The Huffington Post Canada has run about income inequality were based on research studies that relied in part on the StatsCan survey.)

The SLID’s death has drawn the attention of Montreal-area NDP MP Helene Leblanc, who issued a stinging statement Friday attacking the Conservative government over the StatsCan cuts.

The Conservatives have waged a full scale war against independent information. Eliminating this survey rivals the abolishment of the mandatory long form census, which pushed Canada’s chief statistician to resign in protest. This short-sighted decision will deprive economists and researchers of crucial data needed for measuring the well-being and quality of life of Canadians,” Leblanc said.

(She was referring to the Tories' controversial 2010 decision to make the long-form census voluntary, a move critics said would lower the quality and reliability of data, and which prompted Statistics Canada head Munir Sheikh to quit.)

Leblanc suggested the government in Ottawa may have had ideological motives for reducing StatsCan’s budget. “Is [the government] scared that Statistics Canada’s data on the labour market will contradict its ideology?” she asked.

In the latest federal budget, StatsCan suffered a $33.9 million -- or roughly 7.5-per-cent -- reduction to its funding. But recent news reports suggest the cuts will be even deeper, because some of StatsCan’s funding came from other government department that are also now struggling to cut spending. As a result, total cuts to StatsCan’s budget could come close to 10 per cent. Around half of the agency’s 5,700 employees have received layoff notices.

“Government departments will see the volume and detail of information available sharply reduced,” chief statistician Wayne Smith said in a private message obtained by Postmedia News. Smith reportedly described 2012 as “a year of sacrifice.”

Other StatsCan surveys have hit the chopping block as well, including Perspectives on Labour and Income, which provides data and context on such things as retirement, work absences and unionization. That cut has also resulted in laments from economists.

All of this is happening at a time when the data on income inequality in Canada was just getting interesting -- and Canadians were growing interested. The Conference Board of Canada, for example, released a report last year showing that income inequality is rising faster here than it is in the U.S. And in a survey for the left-leaning Broadbent Institute, released earlier this year, 77 per cent of respondents said the growing income gap is a “serious problem.”

PHOTOS: FINDINGS OF THE BROADBENT INSTITUTE'S INCOME GAP SURVEY

The issue is now being championed by a growing numbers of politicians from an ever-wider spectrum of ideologies. Liberal MP Scott Brison called on the Conservative government last week to form a committee to study income inequality. His motion passed Parliament with the support of opposition parties and a number of Conservative MPs.

In an interview with The Huffington Post Canada, Brison suggested that growing inequality threatens the foundations of Canada’s economy.

My fear is that if income inequality gets too great, and when citizens lose hope, that they may be drawn towards economic policies and politicians offering economic policies that are anti-market,” Brison said. “If people lose faith in the system, that can lead to a rejection of the entire market-based economy and ultimately, that would be really bad for business.”

Other observers fear that, with the cuts to StatsCan data, it may be too late to stem the tide -- or even to know whether the tide has been stemmed. That seems to be the position of Andrew Jackson, the chief economist for the Canadian Labour Congress.

Soon we will live in a world where we lack an empirical basis for policy and political debate, leaving everyone even more free to invent their own facts,” he said of the StatsCan cuts.

10 AMAZING FACTS ABOUT INCOME INEQUALITY

10 Amazing Facts About Income Inequality From Richard Wilkinson
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FINDINGS OF THE BROADBENT INSTITUTE'S INCOME GAP SURVEY

Findings Of The Broadbent Institute's Income Inequality Study
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