Opinion: Ten reasons Canadians are unhappier

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I was surprised but not shocked when the latest international survey of happiness found that Canadians have become considerably less happy. In 2012, when the survey was first published, we were the fourth-happiest country in the world. This year we are 15th.

The index of happiness used to create this ranking is based on survey respondents’ subjective assessment of where on a scale of zero (least happy) to 10 (most happy) they find themselves. As in all surveys that rely on the use of subjective criteria, the results should be treated skeptically. But since the same reasons for skepticism exist for all countries in the survey now and ten years ago, the causes for this drop in our ranking deserve consideration.

The happiness of every individual is influenced by many things that are highly personal but it is possible to identify some factors that are almost certainly shared by most Canadians. For example:

• Inflation has caused real incomes to fall, recently at 8.1 per cent annually, with more price increases expected in the coming months. Policies to stop inflation are likely to cause significant economic problems.

• The cost of housing relative to income (affordability) is the most important component of inflation. It has risen sharply and has made Canada’s largest cities among the least affordable in the world.

• Canada’s federal debt has reached its highest peace-time level. When interest rates rise, as they are widely expected to do, the cost of servicing it and the consequent fiscal burden on taxpayers will increase as well.

• Health and health care have serious effects on Canadians’ happiness. Many of us cannot find a family doctor and face long waits to consult specialists and get access to emergency services, medical imaging and needed surgery. By these measures and in several other ways, we do very poorly in comparison with other developed countries offering universal, free health care to their citizens.

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• Immigrants require housing, health care, education and public recreation facilities, all of which are in short supply. In the 1980s immigrants numbered about 100,000 a year. Their number has since increased steadily and will be 400,000 in 2023.

• Freedom of speech is essential to the functioning of liberal democracies but in recent years has become more and more restricted. Codes of political correctness dominate conversations in universities and on the pages of popular media. Violators of these codes are “cancelled” by self-appointed guardians, usually without the opportunity for self-defence.

• In the past, the main role of governments has been to create equal opportunities for success in life but now, increasingly, it is to equalize outcomes. In trying to do so, governments impose taxes and regulations that severely distort incentives to work, save, invest, take risks, and own property. Such policies not only decrease economic growth but are considered by many to be unfair.

• Another important aspect of this redistribution policy that many Canadians regard as unfair involves regulations requiring employers to give various forms of hiring preference to women and people from visible minorities even if other Canadians have the same qualifications, skills and work habits.

• In the past, the public could hold politicians accountable for the environmental and social policies they create. Now, under the new ESG system such policies will be made by businesses without the traditional accountability to the public.

• Canada’s federal government has promised to design policies consistent with “Great Reset”and “Build Back Better” paradigms for organizing the economy and society, creating worry that democratic, free-market capitalism increasingly will give way to government planning and massive redistribution of income.

Space does not permit the listing here of more of the many government policies that make many Canadians unhappy. But every year scholars construct the Economic Freedom Index, which measures a wide range of policies that affect happiness. They do so under the headings of: countries’ size of government; characteristics of the legal system and security of property rights; sound money; freedom to trade internationally; and regulation.

As it turns out, countries’ level of economic freedom is highly correlated with the level and growth of their per capita income, life expectancy and other important indicators of economic and social well-being, which in turn seem likely to determine happiness. By this measure, Canadians have not done well recently. The country’s ranking has fallen from seventh in the world in 2012 to 14th place in 2021.

A study by the OECD indicates what lies ahead. It forecasts that the growth in Canada’s per capita income in the year 2030 will be the lowest among all members of the OECD. Happiness is almost certain to follow the same trajectory unless we see a wholesale reversal of the damaging government policies of the recent past.

Herbert Grubel is emeritus professor of economics at Simon Fraser University and a senior fellow at the Fraser Institute.