Times are tough: how is Canada doing?

This year, our findings uncover some troubling truths about the connection between our economy and our wellbeing

The Honourables Monique Bégin and Roy J. Romanow, Co-Chairs, Canadian Index of Wellbeing (CIW) Advisory Board

We’re living in a time of uncertainty. Dominant political institutions are stumbling, long revered pollsters now have difficulty predicting election outcomes and despite sagging voter turnout, those still casting their ballot seem open to considering alternative options. Everywhere pundits are scrambling to understand why. We ask the question: Could it be governments and political parties are not truly responding to the needs and values of everyday citizens?

With the release of our second composite index report, the CIW has found the 2008 recession hit Canadians harder than Gross Domestic Product (GDP) numbers revealed and the decline in our wellbeing continues despite subsequent economic recovery. From 1994 to 2010, Canada’s GDP grew by a large 28.9 per cent, while improvements in Canadian wellbeing over the same 17-year period saw only a small 5.7 per cent increase. Yet still, wellbeing is largely gauged by GDP measurements alone, presuming economic growth equals a better quality of life for citizens.

CIW draws from a deep well of data using 64 separate indicators within eight inter-connected domains central to the lives of Canadians: Community Vitality; Democratic Engagement; Education; Environment; Healthy Populations; Leisure and Culture; Living Standards; and Time Use. When partnered with GDP, the CIW provides more comprehensive data to help decision makers better assess the impact of policies and programs. This year, our findings uncover some troubling truths about the connection between our economy and our wellbeing. When Canada’s economy was thriving, Canadians saw only modest improvements in our overall quality of life, but when the economy faltered, our wellbeing took a disproportionate step backward.

Deterioration in the environment, and in living standards indicators such as job quality and economic security, soaring long-term unemployment and persistent income inequality speak to the growing unease felt coast to coast. Wealth creation has not been fairly distributed and, as a result, everyday Canadian families are falling behind. It is important to bear this all in mind as governments contemplate approval of pipelines, changes to pension policy, or new international trade deals. We believe the benchmark in any decision must be: Will it improve the actual wellbeing of citizens?

Despite these difficult times, the CIW has uncovered a few beacons of hope that offer further insight into the needs and values of everyday Canadians. Despite the recession, Canadians continue to report an increased sense of belonging to our communities. More than 80 per cent volunteer to help others. Violent crime is at its lowest level since 1994, having dropped every year since 2001. Property crime, also at its lowest level, is down 48 per cent since 1994. And the percentage of Canadians who feel safe walking after dark is at its highest level. Given the focus on balancing budgets, the CIW asks if the needs of Canadians are really being met by government plans to spend more in this area?

The CIW has also found that citizens are stepping up when it comes to the environment. Canada is still creating one of the biggest ecological footprints in the world, but only six per cent of all greenhouse gas emissions came from Canadian households in 2010 and despite an increased population, total household emissions are in decline. In contrast, more than 60 per cent of the contribution comes from transportation, fossil fuel industries, and electricity production and it continues to grow. Considering respiratory diseases related to air pollutants account for a significant number of all hospital visits, adding to our overburdened health care system, and the fact that climate change is expected to have a serious detrimental impact on the global economy, action must be taken. Citizens have proven they are willing to do their part but clearly there is a need for governments and industry to do the same. 

History shows Canadians share a legacy of coming together during hard times to build a stronger foundation for a vibrant future. As the world continues to struggle from the 2008 recession, we believe this same legacy holds the key to our collective recovery and growth. Measuring the wellbeing of citizens is paramount to any government or political party determined to lead a country through these difficult times.

Read our complete findings at: www.ciw.ca. 

The pros and cons of the Canadian Superindex

This post by Donato Speroni originally appeared in Italian in the Numerus section Corriere Della Sera and was also published on the Istat  BES blog.

Canadians are the only ones, along with the small and far away country of Bhutan, to have developed an all-encompassing "happiness index" to be compared with GDP (gross domestic product). This work took several years and finally came to a tentative conclusion: Roy Romanow, Chair of the advisory board of the University of Waterloo who created the Canadian Index of Wellbeing (CIW), has announced that from 1994 to 2008, GDP in Canada has increased in real terms by 31%, while well-being has grown only 11%.

"There are some very, very troubling signs," Romanow said in an interview.

"I think if we continue on this trajectory we're going to have bigger and bigger disparities. You can never build a solid political, social and economic community with wide disparities."

The final report of the first conclusions of the CIW was released on October 20, 2011 and had a lot of attention in the local press, including the Huffington Post Canada. The methodology has been described previously on Numerus, and  in fuller detail on Wikiprogress.

At a time when Italy is developing its BES (Benessere equo e sostenibile: fair and sustainable new measures of well-being), one wonders if the road to a single encompassing index which brings together the different sectors (in the Canadian case eight indicators, each based on eight different data, for a total of 64 series) is a useful and viable way. Without presuming to give a definitive answer, we can see the pros and cons.

Going against the Superindex is the fact that it is snubbed by many methodologists because its construction is clearly questionable. We have already seen how difficult it is to determine the weights of the different domains of well-being: is health more important, for example, or are social relations? The Canadians have solved the problem by giving all of the domains the same weight, while the OECD has instead allowed users to attach the weights they prefer. But it is clear that it does not arrive at a unique indicator.

In favour of Superindex is that it obviously has the most media impact, i.e. the possibility of building a truly alternative number or at least one that’s complementary to GDP. Proponents point out that construction of a composite index for each sector, encompassing for example all aspects of health or safety, is equally questionable, so you might as well go one step further and get to a single number. 


A composite superindex undoubtedly involves a great loss of information compared to the so-called "dashboards" that present several important data simultaneously. But, as has been done in Canada, having the indices for each sector presented to the public as they become available, concentrating for example on the environment one month, then the relationship between citizens and institutions or education the month after, can attract continuous attention from the media about the different components of human well-being. At that point the Superindex would be a synthesis of all this work: an additional information, to complement the GDP, without hiding the wealth of information which was used to build it.

We repeat, however, that the path to get to Superindex is very questionable. It is no coincidence that in Canada this process has been developed by an independent university and not by Statistics Canada. The CIW data come largely from official statistics, but the production was left to a private body. On the other hand, (on this controversial topic, there is always a pro and a con) can we imagine building consensus on a Superindex in Italy without the blessing of official statistics?

How's Life?

By Romina Boarini

How’s Life? This is the (seemingly) simple question that the OECD put at the centre of its recent work on measuring well-being, launched on October 12 during the conference marking the two years of the Stiglitz-Sen-Fitoussi’s report (see also recent Angela’s post). How’s life talks of what people value most in their lives, what they can do, what they are and what they would like to be. Those who associate the OECD with economic forecasts and free market policies may find surprising that the OECD takes the well-being business so seriously, especially in hard economic times. But since the Organisation is seeking to inspire Better Policies for Better Lives, assessing how life is going and how it can be improved is just as fundamental as looking at financial markets and public debt.

As you readers of Wikiprogress all know, the OECD has been long involved in the quest for better measures of well-being and progress. But this is the first time that the OECD puts together many comparable indicators of well-being in OECD and a few emerging countries. How’s Life analyses well-being through eleven dimensions of people’s lives (income, jobs, housing, health, work and life balance, education, social connections, civic engagement, environment, personal security and subjective well-being), presenting a large amount of evidence on these areas. It also looks at the quality of existing well-being measures and proposes a few avenues for taking the statistical and research agenda on well-being forward.

The main findings from How’s Life are:

Well-being is much more than money. This is where we started from but this is also where we arrived at the end of the journey. How’s Life shows that economic measures are not enough to capture the complexity and the beauty of life, but also the struggle that life represents for many. Income is important for well-being, but there are other aspects, for instance social ties, opportunities and freedoms, that count even more.

Understanding well-being has a lot to do with inequalities. We already knew that averages are not enough for assessing economic well-being because income inequality is large in many countries. What we did not know, and How’s Life tells us, is that there are also many inequalities in health, education, civic engagement, social ties and environment. Many of these inequalities are driven by low-income and low-education, suggesting that nurturing children from early years can greatly make their adult life better.

Well-being is both objective and subjective. There are components of well-being that are essentially objective: having a decent housing and being healthy for instance. But there are also very important subjective aspects to take into account: for instance whether people like their jobs, whether they feel insecure in the neighboourhood where they live, etc. How’s Life shows that there are sometimes gaps between objective life circumstances and how people feel about them: for instance there are 10 insecure people per every victim of crime in the population. Gaps do not indicate that some indicators are more reliable than others. They just indicate that these various indicators are capturing different aspects of personal security and that it is important for policy makers to address criminality and concerns of crime at the same time.

How’s Life finds that well-being is not only individualistic, i.e. depending on what people have and do for themselves. It is also very much about spending time with others, helping others, building a community and feeling part of a large social network that can help in case of need. For instance life satisfaction goes up significantly when volunteering or when enjoying strong social ties.

Finally, How’s Life shows that no country excels in all dimensions (and this is also why it is important to look at all facets of people’s lives rather than at one headline number). There are however countries that tend to do very well in many of the dimensions considered, for instance Australia, Canada and the Nordic countries. Why is that? Two factors seem to matter: inequalities and the key role that well-being plays in the overall political strategy of these countries. Indeed, inequalities tend to be lower in the top-performing countries, especially among the Nordics, suggesting that a more equal distribution of opportunities and outcomes is also beneficial for average well-being. Secondly, many of the well-performing countries have adopted a broad well-being framework for designing their policies (see for instance Australia Treasury’s well-being framework and Norway’s sustainable development strategy). Their strategy is paying off.

What’s next? The second edition of How’s Life is planned for May 2013. In the meantime we will update the Better Life Index, the other big pillar of the OECD Better Life Initiative. We are also running various research projects to get better measures and understanding of well-being, together with many other international organisations and researchers worldwide. You can learn more about in our web site.