Whereas Ottawa
debates affordability
, defence spending and funding incentives, tens of millions of Canadians are combating
stagnant wages
, weak
unemployment advantages
and rising financial insecurity, which is a disconnect economist Lars Osberg says is having critical social penalties.
“The massive lacking hyperlink is that we don’t have a lot of a
social security web
in Canada,” the Dalhousie College economics professor stated. “We haven’t had it for fairly some time and we’re going through an unlimited quantity of
financial insecurity
and a protracted interval of stagnant actual wages.”
Osberg stated the previous yr has been a roller-coaster, with
uncertainty round jobs
, commerce and authorities coverage. Some Canadians could have profited from this instability by investments, actual property positive factors or enterprise alternatives arising from market volatility, however many households are beneath intense monetary stress, a actuality masked by political discuss of “affordability” that fails to deal with deeper structural issues, he stated.
On the coronary heart of the problem, he stated, is Canada’s eroded social security web, notably
employment insurance coverage
(EI), which, together with different social packages, isn’t maintaining with immediately’s financial system.
EI advantages have largely stayed the identical in worth and substitute roughly 55 per cent of an individual’s wages. The advantages are increased than in america, however they lag far behind European international locations corresponding to Denmark, the place they substitute 90 per cent of an individual’s wages, the Netherlands (70 per cent) and Sweden (80 per cent).
Osberg stated extra persons are working momentary or gig jobs, unemployment is increased than it was once and new applied sciences corresponding to synthetic intelligence are altering what sorts of jobs can be found. Consequently, he stated the system must be up to date so persons are protected when their work modifications or disappears.
Greater than 870,000 Canadians
reported gig work
as their most important job in late 2022, and momentary and half‑time staff report far increased job insecurity than everlasting staff, in keeping with Statistics Canada information.
However Ottawa isn’t treating the general public’s concern about financial insecurity and the weak social security web as priorities, Osberg stated.
“Individuals are not seeing their issues acknowledged in Ottawa,” he stated. “Lots of people really feel insecure and pressed financially, and the federal authorities simply doesn’t appear to need to confront this in a significant method.”
Canada’s unemployment price has been increased and extra unstable in 2025 in contrast with 2023 and 2024. The speed dipped to about 6.5 per cent late this yr, suggesting some easing within the labour market, however year-over-year joblessness usually elevated.
Rising dwelling prices are additionally including stress, with 67 per cent of Canadians saying the price of dwelling is worse than ever, in keeping with Abacus Information analysis launched in December. In November, meals costs climbed 4.7 per cent yr over yr, the quickest tempo in two years, and households can count on to pay roughly $1,000 extra for meals subsequent yr, in keeping with Canada’s Meals Worth Report 2026.
“This isn’t a marginal concern or a background nervousness,” David Coletto, chief govt of Abacus Information, stated. “It’s a dominant lived expertise that continues to form how Canadians interpret authorities efficiency, management and competing coverage priorities.”
Osberg is crucial of some federal priorities, notably the federal government’s large enhance in defence spending, which is deliberate to rise to 5 per cent of gross home product (GDP) by 2035, from about 1.4 per cent immediately.
The federal funds earmarked roughly $63 billion over 5 years for navy gear, personnel and infrastructure, and about $280 billion in broader capital initiatives for infrastructure, innovation and industrial improvement.
The funds did embrace a modest tax minimize for center‑class Canadians and launched computerized tax submitting for low‑earnings households, making it simpler for tens of millions to obtain advantages such because the GST/HST credit score and Canada Youngster Profit in 2026.
However Osberg stated assist for on a regular basis Canadians stays restricted.
“If in case you have a authorities targeted on growing defence spending to 5 per cent of GDP, and on large initiatives which might be very capital-intensive, however don’t create many roles, then you definately’ve received a authorities that isn’t listening to the uncertainties and anxieties dominating the lives of loads of Canadians,” he stated.
Osberg stated extended financial insecurity can have critical social and political penalties, together with rising anger, polarization and openness to extremist or exclusionary politics, that are tendencies already unfolding in different international locations, notably the U.S.
He stated probably the most pressing challenge in 2026 would be the rising sense of insecurity felt by working Canadians. His prescription is evident: strengthen employment insurance coverage and rebuild the social security web.
“It’s completely attainable to stroll and chew gum on the similar time,” Osberg stated. “You’ll be able to construct pipelines and put money into large initiatives whereas nonetheless having a powerful insurance coverage system for individuals who lose their jobs.”
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