BUSINESS

OECD Better Life Index: Canada Ranks 3rd, But Income Gap Worries Surface

05/27/2013 08:47 EDT | Updated 07/28/2013 05:12 EDT
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Canada has placed third in an OECD ranking of the best countries to live in, but the report raises concerns about the degree of income inequality in the country.

"There is a considerable gap between the richest and poorest – the top 20 per cent of the population earn more than five times as much as the bottom 20 per cent," the OECD's Better Life Index report noted.

Canada also scored low on the job security measure, with 11 per cent of employees working on a "contract" of six months or less, slightly higher than the OECD average of 10 per cent.

The OECD's concern about the income gap seemingly reflects that of Canadians themselves. A Pew Research Center study released earlier this week finds Canadians are more likely than Americans to believe that income inequality is growing, even though evidence suggests the problem is more acute in the U.S.

But overall, the index found Canada among the leaders in most of the 24 indicators measured, everything from hard data dealing with jobs and income, to perceptions of something the OECD calls "life satisfaction."

The Paris-based OECD does not give an overall ranking, but if all the indicators are added up and given equal weighting, Canada would come in third behind Australia and Sweden.

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OECD Better Life Index 2013

"Canada performs exceptionally well in measures of well-being, as shown by the fact that it ranks among the top countries in a large number of topics in the Better Life Index," the organization says in its profile of the country.

"In general, Canadians are more satisfied with their lives than the OECD average, with 82 per cent of people saying they have more positive experiences in an average day than negative ones."

Canada's high ranking comes about because it scores inside the Top 10 in most of the major categories and above average overall among the 36 advanced countries studied.

Canada did rank first in a couple of minor sub-indicators. For example, with 2.6 rooms per person, Canadians are on average the best housed by that measure, and they are also among the safest, reporting the fewest assaults.

Perhaps surprising, Canadians also appear to trust their governments more than many others. According to the OECD, 67 per cent say they trust their political institutions, well above the 36-country average of 56 per cent.

However, when it comes to voting, Canadians fell well below the OECD average of 72 per cent with a record of only 61 per cent.

On more mainstream criteria, Canada ranked in the Top 10 in terms of household disposable income, wealth, educational attainment, self-reported health — although the 81-year life expectancy is middle of the pack.

Canadians also did well in terms of work-life balance, working an average of 1,702 hours a year, less than the OECD average of 1,776.

Overall, the OECD comparison is more flattering to Canadians than the recent Human Development Index from the United Nations, which had Canada slipping to number 11 in 2012.

The OECD measure appears more broad-based, with 11 major categories of well-being measured, as opposed the UN's three — health, education and living standard.

Both, however, include subjective elements that have given rise to skepticism about their usefulness for public policy. While many of the OECD indicators are based on hard data, such as incomes, employment rates and life expectancy, it also includes self-reporting evaluations of such subjective criteria as life satisfaction, state of personal health and water quality.

-- With files from The Canadian Press