Canada’s middle class and why they are important to the election

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In the federal election, you’ll likely see competing parties making promises and policy recommendations to a critical (but vague) voter base: the middle class.

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Liberals have just called for a “middle-class” income tax to the lowest income tax range, which has also benefited Canadians from higher incomes – the Conservatives have subsequently cut larger tax cuts and promised to “cut taxes for everyone.”

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The NDP proposes to increase the base individual amount to $19,500 and remove the Goods and Services Tax (GST) from the base purchase, which it says will help to go beyond the super-rich “working and middle-class families.”

But who really formed the middle class in Canada – why do politicians care?

What is the middle class?

Melanee Thomas, a political science professor at the University of Calgary, said the middle class may be difficult to define, especially in Canada.

Thomas said some people define the middle class by income, others look at power, status and family origins. She said the British drama series Downton Abbey showed the idea that even aristocratic families were considered upper classes, even if they were cash-poor.

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Barry Eidlin, a sociology professor at McGill University, said there is a clear difference between the “class analysis concept” of looking at statistics and the definition of class’s life identity, which is related to how people think of themselves.

Although some schools of thought look at the class through an educational and work perspective, such as being an employee rather than an employer, Eidlin said it is often believed that the middle class can provide some comfort for essentials such as groceries and housing, such as groceries and housing.

In 2019, members of the Ottawa Liberal Party of Mona Fortier, the then middle-class thriving Ottawa parliament, defined the middle class as a family that could incorporate their children into hockey.

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“It’s a very Canadian way of thinking,” Thomas said, but added that it has to do with the idea that middle-class families have the ability to pay for small luxury goods.

How much money do middle-class families have?

While the latest data from Statistics Canada fixes the median after-tax income at $70,500 in 2022 inflation, Toronto-ruling bank economist Maria Solovieva said she focuses on statistics that define the middle class.

Soloviva said Statistics Canada divides Canadian households into five income fifths, so the third quintile, sometimes even the second quintile, can be attributed to the middle class.

Recent data pegs the average third-income fifth household with an average disposable income of about $78,100 in 2023, while the average second-income five-cent household with an average second-income five-cent household with an average income of $59,000.

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By comparison, the lowest income fifth is $29,300, and the average household disposable income of one-fifth of the highest income is $200,900.

These numbers may also vary depending on the location of Canada where you live. For example, the average third-income household with a disposable income of more than $86,800 in Ontario, while in Saskatchewan, that number hits $70,000.

Solovieva said that using the definition of middle-income, middle-class families may invest less and save less than upper-class families, which may benefit from additional income from assets such as rental properties.

Thomas said that while middle-class families are often associated with home ownership, people with reasonable salaries in Calgary and similar metropolitan areas may still be unable to buy a home because of soaring prices.

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How to compress middle-income families when rising prices?

The rising cost of living and income inequality further complicates the definition of middle-class composition, as it may mean that typical families cannot afford what previous generations can afford.

Middle-class individuals with good jobs and a reasonable budget are often associated with the comfort of being able to afford groceries, transportation and extracurricular activities for their children, Thomas said. However, today’s “good middle-class income” has weak purchasing power today.

“Average personal disposable income for middle-income households has not kept up with the rise,” TD’s Solovieva wrote in a note last year.

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“As growth in real income and high debt burden lags, these households are more likely to remain liquid-bound in the coming years and will be forced to make more economical choices.”

Soloviev said this means middle-income households may drag back their spending, especially in the area of ​​discretion.

“You have an idea that inflation usually taxes the poor,” she said. But middle-income families, for example, bought homes during the 19th pandemic and renewed mortgages at higher interest rates, brought more debt. “In this particular case, middle-income households also have inflationary pressures.”

Why do politicians make commitments to the middle class?

Edling said Canadians view themselves as a major middle-class society, similar to the American Dream ideas. He said politicians like to make commitments to the middle class because they attract this unified identity – the share of the voters of the lion.

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“There is an idea about the people and the elite, and it is intentionally vague, not the working class is contrary to the boss,” Edlin said. Politicians declared that the policy against the middle class is because “it allows people who are part of the (upper class) in a more class analytical framework to be part of the people.”

As costs rise, many economically stressed Canadian families may want to see changes that provide them with more disposable income, Solovieva said.

“There is one reason (parties) that have proposed cuts to cut minimum tax rates, because it is designed to help everyone, even those above the tax market,” Thomas said.

She said most Canadian families may be concerned about the cost of living.

“It’s a big shift and… illustrates the fact that many people feel squeezed because things they were able to manage before now seem increasingly difficult (affordable).

•Email: slouis@postmedia.com

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