The Current - In this election, what do middle-class Canadians want?

Episode Date: April 21, 2025

Ashley Casciato from Innisfil, Ont., says she’s struggling to make ends meet, yet still sees herself as middle class — and she’s not alone. With the federal election just a week away, many Canadians are feeling the pressure of a rising cost of living that’s putting homeownership and the traditional middle-class lifestyle increasingly out of reach. We explore how the definition of “middle class” is changing and what party leaders should do to make life more affordable.

It's on. A federal election is here and party leaders are racing around Canada to convince you to give them your vote. We're seeing a lot of spin, a lot of promises and a lot of accusations swirling around. And we are here to filter through the noise. I'm Catherine Cullen, host of The House. And every Saturday we want to slow you down and make sure you're getting the big picture and deep context and everything you need to make politics make sense. Because democracy is a conversation and we're here for it. This is a CBC podcast.

Hello, I'm Matt Galloway and this is The Current Podcast. Well the federal election is one week from today and like many people in Canada, Ashley Cassiato is struggling to make ends meet. I am a single mom. I own a house. I'm a homeowner. I'm a registered massage therapist.

I work for myself. So on top of regular taxes, I pay HSD because I'm considered a business. Ashley lives in Innisfil, north of Toronto, and the costs mount up up despite what she feels is a good middle-class income. I have two young ladies at home a nine and eleven year old. I make probably anywhere between 90 to 100k a year. I definitely think I'm middle class. I work very hard to stay middle class It's very difficult as the one income in the house. Before, what I make would have been considered a lot, but now it's base income to live when houses are a million dollars plus and the cost of groceries has gone up exponentially. So is gas, heat, so is hydro.

Everything has gone up so high that somebody who's making what I make should live comfortably, but I don't. Out on the campaign trail, the main party leaders are promising relief for the middle class. As part of that strategy, today I'm proposing a middle class tax cut to help all working Canadians get ahead. Canada First Conservatives will cut income taxes by 15% for the average worker or $2,000 for the average couple. Our plan helps middle class folks the most.

But what does middle class mean and who does it refer to? In a moment, we'll hear from an economist on why the answers to those questions matter to the economy. But first, Michelle Morato is a professor of sociology at the University of Alberta and the lead researcher on something called the Great Canadian Class Study. Good morning, Professor Morato. Good morning.

Thanks for having me on. We'll get to the study in a moment, but first Ashley defines herself as middle-class. She's a homeowner, makes about 90,000 a year. Is she middle-class? So in this case, one of the interesting things we've done in our research is think about the many different ways people can define middle-class.

And one of the things we've done is ask people what they think of themselves. So I would say if she's defining herself as middle-class, she falls into that middle-class category, but you bring up some interesting things along with how she defines herself. So talking about both income and home ownership, and I think those are some of the key ways

in which people think of themselves in terms of being in different social classes. So having that income that falls in the middle of the distribution is one of the key things, but oftentimes today, one of the other things we associate middle-class with is that idea of home ownership. And what other markers would you include in,

in a definition of middle-class? So in our case, we like to think about social class very broadly. And right away, one of the things we'll think about is income, but it's often much more than that to people. It also links to their lifestyle. So the things that they're able to afford, the things that they're able to do with their families

are really important, but also just the things people do for fun and what they enjoy in life can often be associated with social class as well. So we can think about it as very narrowly connected to income, but most of the time, when you start to talk to people, all these other little things that come up often in terms of lifestyle, things people do. And then as we mentioned earlier, things related to say, homeownership and stability as well.

So let's talk about the great Canadian class study. You surveyed more than 8,000 people across the country. Broadly, what did you find about how Canadians view the world? So let's talk about the great Canadian class study. You surveyed more than 8,000 people across the country. Broadly, what did you find about how Canadians view social class? So this was a big study we started a couple of years ago. We surveyed a lot of people. We also conducted interviews to learn a little bit more in terms of what

they think about social class. And overall, we found that most people did identify as being part of the middle class. And overall we found that most people did identify as being part of the middle class. About 42% of people who responded to the survey said that they thought they fell into the middle class, but there are also other people that fell at other parts of the class spectrum. So another 18% identified as being members of the upper middle class. Another 17% thought they would say that they were lower middle class. 17% thought they were working class. And we also included a category for poverty class, which about 6% of people thought they fell in as well. So we do see that most people think of themselves as being middle class in Canada, but not everybody. And there's

a much, something much broader than just middle-class here. Well, in terms of definitions, I mean, the OECD has a definition for middle-class 75 to 200% of the median household income in a country. So in Canada, that would be 52,000 to about 140,000. That's quite a wide range. I get the sense you don't agree with that definition. So in this case, I wouldn't think about that as

being middle income, because income is just one part of social class. And again, as you say, that's a really broad range of incomes where people making $50,000 a year might have a very different lifestyle than people say making $150,000 a year. So if we just think about income, I don't think that's quite enough to really get at this concept of middle class. a very different lifestyle than people say, making $150,000 a year. So if we just think about income, I don't

think that's quite enough to really get at this concept of middle-class for people. But if it's a concept, I mean, and most people think of themselves as middle-class, what's the gap between their incomes and how they perceive themselves? Yes, agreed. Yeah.

So many cases income comes up a lot, but what we're seeing today though, especially with rising prices, is that a lot of people who would have say fallen in that same income distribution a decade ago, 20 years ago, feel a lot differently about how life is for themselves and the things that they can afford. So that same income doesn't necessarily get you that same lifestyle and especially if you

want to be a homeowner, for many people it doesn't necessarily translate to homeownership. So we're starting to see some of those things that people once associated with having those middle incomes as not necessarily getting them that middle-class lifestyle anymore. So I think we're starting to see some changes in that potential definition, especially for younger adults in Canada. Well, I want to get to that, the perceptions of what it means to be middle-class between

older and younger generations. What did you find there? So this is a really interesting aspect and comes something kind of expect, especially when you spend a lot of time teaching younger adults as well. But generally, younger adults today are less likely to identify as middle class than older adults.

So only about a third of 18 to 24 year olds thought they would call themselves middle class compared to about 55% of older adults over 55. So you see big differences with younger and older adults in this perception of who is going to be middle class. And it definitely makes sense, because younger adults are less likely to have access to key resources like home ownership, but also things related to the job market matter in this case, where we see that jobs aren't necessarily as stable as they were in the past. And younger adults don't necessarily have that pathway that they saw potentially going into university, where they could potentially get an education, get a job and a career that's going to last them for a while. There's much less stability in this case.

them for a while, there's much less stability in this case. And I think all this is starting to factor into how younger adults are thinking of themselves in terms of social class and whether or not they might fall into the middle class. I'd like to go back to Ashley, who we heard from earlier, she feels like the middle class is shrinking.

Let's take a listen. I'm having a hard time coming to grips with what the term middle class even means anymore because I feel like all the people who used to be middle class are now starting to sink lower and lower. Their mortgages are coming up for renewal and their mortgage rates have gone up and now their houses, it's not worth as much as it used to be. Or if people bought recently, our middle class is disappearing. You're either like striving and surviving up here, or you're going lower and lower and lower.

Upper middle class is kind of gone and now everybody's like middle lower class. Hearing from Ashley, how does that square with the findings of, of the study? Um, I think it fits very well with a lot of people were telling us and that middle lower class is a really interesting way to think about things but with increasing inequality where we see bigger divides between people at the very top and at

the very bottom we start to see fewer people in the middle and we start to see things changing in terms of how middle-class people or how people who would have once thought of themselves as middle-class are able to manage things, especially with things related to housing, but also related to debt as well. Um, we've seen for the past five years or so, a lot of people taking on things in terms of credit card debt in order to make ends meet. And that can create a struggle as well for

a lot of people. So is Ashley correct? Is the middle class shrinking? Well, again, that goes into how you define middle class in many ways. I wouldn't say the middle class is disappearing in this particular case. I would say that a lot of people are changing how

they are going to end up thinking about middle class, where I don't think middle class is necessarily going to have that idea of stability which it used to have in the past for many people especially with precarity in the job market, precarity in housing, increasing prices and all those things that really start to add up for people. The former Prime Minister Justin Trudeau used to regularly refer to the middle class and those working hard to join it. Join it. How much class mobility is there in Canada?

There is definitely some, especially people kind of in the middle. So we do see people who have moved up in terms of their parents, especially from working class to middle class in that identity area, but we also see a lot of stickiness towards the ends. So a lot of people who grew up in upper class or upper middle class families who still

have that class standing and fewer people who are able to move out of that poverty class, that very lower middle class standing as well. So there's definitely some mobility there, but there's also a stickiness, which I think is going to get worse in upcoming years. So during this federal election campaign, we've heard party leaders talk about giving tax breaks to the middle class. What would be the biggest help for the

middle class from government? So tax breaks are something that's often really easy to talk about, really straightforward and people can see right away where that money's going. However, I would encourage people to think even more broadly in terms of taxation and the things we use it to support. So in many cases, giving those tax breaks can be great right away. People have more money coming in in their paychecks, but we're also going to end up

losing where those taxes had been going to, supporting things like education and healthcare. So I think in this case, we also have to be really conscious of what the consequences of tax breaks are and whether or not those tax changes are being distributed throughout that income group in many ways. So if we are balancing out tax cuts for the middle class with increasing taxes for those who are doing really well for those wealthy individuals at the top of the income distribution,

so we're still then able to support those social services and healthcare and education, that's one thing. If we're thinking about this as just tax breaks for the middle class and for everyone, we're going to also have to consider what's the consequences of those tax breaks are going to be. And briefly, what do those hoping to reach the middle class need most? So in terms of what they would need to say, talk about in this case, I think going back

to those comments we had earlier, thinking about the growing precarity that's associated with middle class and potentially how middle class might not necessarily be what previous generations thought of it, can be really important in this particular case, because although we have people who identify as middle class,

a lot of people feel like that is sliding a bit. There's less stability there, and they need some reassurance that the things they have obtained aren't necessarily gonna disappear. And for those who are struggling a little bit more, that there can be some help and support out there so they can improve different aspects of life.

Professor Morato, we'll leave it there. Thanks for joining us. Michelle Morato All right. Thanks so much. Pete Slauson Michelle Morato is a professor of sociology at the University of Alberta. Michael Morato In the fall of 2001, while Americans were still grappling with the horror of September

11th, envelopes started showing up at media outlets and government buildings filled with a white lethal powder, anthrax. But what's strange is if you ask people now what happened with that story, almost no one knows. It's like the whole thing just disappeared. Who mailed those letters? Do you know? From Wolf Entertainment, USG audio, and CBC podcasts, this is Aftermath, the hunt for the anthrax killer.

Available now. Moshe Lander is a senior lecturer in the economics department, The Hunt for the Anthrax Killer, available now. Moshe Lander is a senior lecturer in the economics department at Concordia University in Montreal, and he joins us now. Good morning. Good morning. Michelle Morata just talked about how difficult it is to define the middle class now. How do you define the middle class?

Well, I guess I'll start with a joke. I would say that to me, the middle class is me. Anybody who earns more than me is upper class and anybody who earns less than me is lower class. And, uh, it's a sliding scale then, cause as my income goes up and down, my definition slides with it. Um, I think that especially your especially your previous guest would agree that a lot of Canadians will identify themselves, maybe not using as precise a definition as I am, but they

do tend to see it in the same way. I use the OECD one that you cited earlier, about 75% to 200% of median income, and I don't make that distinction between income and class because how you choose to use your income is very, very independent, family size, age of kids, where you live, what job you have, how stable it is. And so to try and pin that down then to say that it's a class thing to me is more difficult than just saying, look, it's a straight income thing. Right. So if it's not just straight income, home ownership has also been a major marker of

middle-class, how are we seeing what it means to be part of the middle-class shift? Well, I think that, uh, maybe boomers did a great disservice to Gen Xers such as myself, because I think a lot of us were raised on a very strict diet of the best thing that you can aspire to in life is to own your own home. And so home ownership became this marker of how well you're doing in life. And it almost created the second class status then that if you are a renter, somehow that's a

shameful experience that you're looked down on in Canada. So if we were to talk about class, then we would say that being a renter, it relegates you to some second class standing. But the reality is that that's not the way it is in a lot of European countries or a lot of countries for that matter. We're renting as just a natural way of things. And so if we're going to make the marker being home ownership, then we're obviously going to have a problem because a lot of Canadians these days cannot reach that level. And that's going to then pin them into a status in Canada that might be below middle class or middle income. How important is it to have a thriving middle class

to Canada's economy? Well, they're the engine of the economy, right? And they're the big spenders. The GDP figures for Canada say that consumer spending is around 60 to 65 percent of the economy. So as consumers go, so does the economy. And small changes in consumer behaviour is the stuff that can tip us from mild growth

into mild recession. But the thing is that high-income Canadians can only spend so much of their income. I know that a lot of us would like to be in that position to try and see how much we could spend. But there's only so many things that you can buy. And you can see even in the ultra elite, where they're spending on rocket ships and space flights and things like that, it really is because they've gotten everything materialistic that they need from this world. Lower income Canadians have no real ability to do anything other than spend all of their income. And because their income is fairly sticky, uh, their spending behaviour doesn't change fundamentally.

So it really is those middle income Canadians that as they change their behaviour up and down, the economy is going to rise and fall with it. Well, let's turn to politics now. The main party leaders have each offered a tax cut aimed at middle-class voters. Now bear with me cause I'm going to read some numbers here, but they're important.

Liberals and conservatives proposing to cut the tax rate paid on the first income bracket, that's people earning between about 16,000 and just under 56,000. The liberals would cut the rate to 14% from 15. Conservatives would cut it to 12.75%. The NDP is promising to raise the basic personal amount threshold under which Canadians

don't pay tax from just over 16,000 up to 19.5. I want to bring Ashley Cassiato back. Here's what she has to say about the proposed tax cuts. I feel like a lot of the tax cuts that have happened have been like $200 here you go, thanks. Like, and it's almost like an appeasal, but it doesn't deal with the core issue that

everything is costing more. And that's what we need relief from. And then if they do drop these taxes, what suffers, our school systems are already suffering, our healthcare system is already suffering. Mochelander, how effective are tax cuts, like the ones being promised by the main parties at providing relief

to the middle class? It's not, it's not effective at all. It's, it's a great political tool and that clip that you played is pretty much dead on. Uh, the liberals have said that their tax cut is worth about $800 to a married couple. And notice the way that they phrase it is as a married couple, because if they said it for a

single person is $400, uh, you know, back of the envelope calculation 365 days in a year, you're talking about a little more than a dollar a day, so that's barely going to get you a small coffee at Tim Hortons. That's not the difference between survival and thriving, right? So I don't think that there's anything substantial there. The conservatives are a little more generous, uh, but their generosity will add up to maybe a large coffee at Tim Hortons per day. Uh, and the NDP by moving the tax threshold, uh, are even less generous than the liberals, which is maybe a little bit surprising because you would expect them to be more generous with, uh, with handouts.

Uh, I think that on the campaign trail, you need to offer people something and people don't have time to sit there and listen to numbers being put forward. So just hearing a tax cut is an easy way to do it. I would also point out that if you take a look at inflation over the last 30 years in Canada, the average price of things over 30 years has doubled.

So a lot of people are talking about how inexpensive things have gotten, but the economic reality is that over a 30 year period, a doubling of prices is actually very mild and reasonable. So I think that there's a certain element of psychology coming into play here that the last couple of years have been particularly pronounced. And so I think people are trying to apply those numbers backward and implying that somehow

things have really become unaffordable when in fact, they've grown at a very modest pace, partly attributable to Mark Carney during his time at the bank of Canada. Well, if not tax cuts, then what other policies are going to be more effective to help the middle-class? Yeah.

So it's medium to long-term. Canada's biggest issue is our flat to falling productivity, and that's the greatest predictor of standard of living out there. So we now see that if productivity is flat to falling, it means that when you go ask your boss for a raise, the best that you could hope to ask for is inflation itself.

If you want anything above inflation, it has to be matched with a productivity increase. So if inflation is 2% in Canada, and I go ask the boss for 3%, what I'm effectively asking for is an increase in my purchasing power. I want 3% more dollars where prices are only rising 2%.

For me, good news, but for the employer, it's bad news. Now, if I went to my employer and said, I want 3%, but I'm also gonna work 1% harder, the boss can justify that because 2% covers inflation and 1% covers my extra effort. Canada is a wash in industries that are not competitive. We could make an alphabet of them, right? Airlines, banks, cell phone service providers,

food processing, grocery stores and so forth. And that's something that's been happening over the last 30 years. So I think where Canadians have the disconnect then is it's not the inflation numbers that they're noticing. It's that their wages are failing to keep pace. What a politician needs to offer Canada is a way to unlock competition into the economy and break open some cost-cited industries and unleash that productivity. Mark Carney tried to allude to that when he was talking about

Catalyzing industry and using it as a way to boost our productivity I certainly didn't hear it from the NDP the conservatives were alluding to it But they didn't really seem to have a policy other than just tax cuts and cuts to the public sector But that's the type of thing though that would show up over years not in the next six months So if you're going to try and satisfy voters on the election campaign, it really is here's 500 bucks, like your clip, uh, said, and you know, go away, uh, and we'll, we'll talk to you in

five years. Well, I want to go to another clip. We are one week away from the election. Ashley Cassiato is still undecided. Take a listen. I honestly am having a really hard time this election. It's kind of like, who's the best of the worst at this point. It's hard to trust the liberals after Trudeau

has made such a mess of what's happened. And then Pierre Polonov says things, I don't like some of his answers, you know, so Jagmeet Singh is there, but I just don't think his party has a chance. So some people feel like that's a wasted vote. It's been very, very difficult for me to some of his answers, you know, so Jagmeet Singh is there, but, uh, I just don't think his party has a chance. So some people feel like that's a wasted vote.

It's been very, very difficult for me to decide. As we've said, politicians spend a lot of time appealing to the idea of the middle class. What's your advice to whichever party forms government after the election in terms of helping these Canadians? They really do need to open up a lot of industries to competition.

It's not price controls. It's not tax cuts. It's how do we get back to an economy where firms have to compete for our business? If firms have to compete, then their ability to increase prices is going to be constrained by competing businesses that would be willing to take away that business, uh, without having to raise their prices.

So that's the type of thing that would allow prices to appear to be a little more stable. And so that means taking on vested interests that would want to protect the status quo. In terms of helping Canadians, I think that they're going to need to try and find a way to make sure that if you're going to tax us Those taxes are being used in a way to increase the productive capacity of the economy So it's not just stuffing cash in our pocket to get us through the next year It's if you're spending that money Are you building the infrastructure that Canada needs that's going to allow that?

Productivity puzzle to be unlocked and propel us forward. And so we can see our wages rise faster than inflation and increase our purchasing power, or at least restore it to where it was maybe 20, 30 years ago where people's nostalgia tends to go these days. And of course, we're doing all of this against the backdrop of a trade war and rising tariffs and trying to address competitiveness in that realm too. Right, and that's exactly kind of wrong place, wrong time for this to fall. But in fact, the last five years have been a lot of

wrong time, wrong places. So with COVID and the aftermath of COVID and the cleanup that had to come from all of the money that was injected into the economy, and then we have our best friend stabbing us in the back and making life a lot more difficult for Canada. It's very difficult to try and find how you're going to do that.

But the reality is that we've seen politicians realize that we do need more trade partners. We need to remove those interprovincial barriers. And while they're not saying it the way that I'm saying it, they are saying that we need to increase competition. We need to increase the number of producers that are there to provide us with goods and services. Moshe Lander will leave it there, thank you. Moshe Lander is a senior lecturer in the economics department at Concordia University in Montreal. This has been The Current Podcast. You can hear our show Monday to Friday on CBC Radio One at 8.30 a.m. at all time zones. You can also listen online at cbc.ca slash the current

or on the CBC Listen app or wherever you get your podcasts. My name is Matt Galloway. Thanks for listening. For more CBC podcasts, go to cbc.ca slash podcasts.