January 21, 2018 — Canadians have felt that the country’s economy has not recovered from recession every year since 2008 in Pollara Strategic Insights’ annual Economic Outlook study – until now. However, the national 10-year high in sentiment masks regional disparities.
The current wave of the study, conducted in December 2017, reveals that half (50%) of Canadians finally feel that the economy is in a period of growth, which is a significant increase of 16 percentage points over last year. Notably, just a third (35%) feel that the country is in a recession, a major decline of 22 points compared to last year.
- The exceptions are the majorities of residents of Saskatchewan (57%) and Alberta (56%) feeling that Canada is in recession. Majorities of residents of Ontario (55%) and Quebec (56%) feeling that the economy is growing. Residents of BC (48% growth vs. 33% recession) and Manitoba (46% vs. 35%) are more likely to feel the economy is growing, whereas Atlantic Canada is split (42% vs. 41%).
These are the results from the 23rd wave of Pollara Strategic Insights’ Economic Outlook Study – Canada’s definitive and longest-running study of the public’s perceptions of the economy and their own personal finances. The online survey was conducted from December 11 to 18, 2017 among a random sample of 1,207 adult Canadians. As a guideline, a probability sample of this size carries a margin of error of ±2.8%, 19 times out of 20. The margin of error is larger for sub-segments.
Overall, according to Pollara’s Emotional Index, the economy does tend to stir more negative than positive emotions, but last year’s trend towards a more positive economic mood continues. More than half (56%) of Canadians feel at least one negative emotion about the economy (-7 since last year; -16 since two years ago) and 44% feel at least one positive emotion (+3; +7). The most prevalent negative emotion is worry (38%) and the most prevalent positive emotion is optimism (28%).
EXPECTATIONS FOR THE CANADIAN ECONOMY IMPROVING
Canadians aren’t sure what to expect for the economy in 2018, as a third (36%) expect it to neither improve nor decline, and a quarter (27%) expect it to improve (up 5% compared to year ago). Another quarter (26%) expect the economy to decline, and 12% are unsure.
Similarly, a quarter (27%; +4) of Canadians also expect the country’s employment situation to improve in 2018, with another 38% expecting it to remain the same. Just a quarter (23%) expect it to get worse, and 11% are unsure.
EXPECTATIONS FOR THE AMERICAN ECONOMY BLEAK
The international context is important, as the grass appears to look greener north of the 49th parallel for Canadians. There is increased economic optimism in Canada while the public also reports increased pessimism about the U.S. economy to the south. Notably, just 19% (-8 compared to last year) expect the U.S. economy to improve, whereas four-in-ten (43%) expect it to get worse. Two-in-ten (22%) expect it to remain the same, and 16% are unsure.
PERSONAL FINANCIAL SITUATION POSITIVE BUT WORSENING
Although Canadian views on the economy are notably improved, perceptions and expectations of their own personal finances are slightly more negative compared to last year. Nevertheless, Canadians do hold more positive than negative views of their personal financial situation. When considering their own finances, half (53%; -3) say they are holding their own and two-in-ten (21%; -7) say they are getting ahead. A quarter (24%; +4) are losing ground.
- BC (32%) and Saskatchewan (31%) residents were most likely to be losing ground, whereas Ontario (25%), Manitoba (23%), and Quebec (21%) residents were most likely to be getting ahead.
Overall, according to Pollara’s Emotional Index, Canadians’ personal financial situation stirs more positive than negative emotions, with six-in-ten (62%; -3 compared to last year) Canadians feeling at least one positive emotion about their personal finances and 49% feeling at least one negative emotion (+1). The most prevalent positive emotions are calm (38%), confidence (35%), and optimism (34%), whereas the most prevalent negative emotion is worry (33%).
VIEWS WITHIN NAFTA CONTEXT
This wave of the Economic Outlook study included questions about the current NAFTA talks between Canada, the U.S., and Mexico. (See our website for the separate release on these results.) During our analysis of the study data, we found a correlation between those Canadians who feel NAFTA has been bad for the economy (14%) and those who are more likely to report negative assessments of the economy and their financial situation.
- Two-thirds (66%) of Canadians who feel that NAFTA is good for the national economy say we are in a period of growth, whereas a majority (55%) of those who feel NAFTA is bad for the economy say we are in a recession.
- Three-in-ten (29%) Canadians who feel that NAFTA is good for the national economy say they are getting ahead financially, whereas 19% say they are losing ground. The reverse holds true for those who feel that NAFTA is bad for the economy: 18% say they are getting ahead and nearly four-in-ten (37%) say they are losing ground. Similarly, 60% of those who feel the economy is growing say NAFTA is good for Canada compared to just 37% of those who say we are in recession.
These results raise the question of whether the NAFTA-negative cohort of Canadians has suffered real or perceived impacts to their financial livelihood due to the free trade agreement. Regardless, this cohort is notably more likely to be found among Canada’s lower income and education brackets. Almost four-in-ten (38%) NAFTA-negative Canadians report a household income of $50,000 or less compared to less than a quarter (23%) of NAFTA-positive Canadians. Similarly, NAFTA-negative Canadians are much more likely to hold a college or technical school education (40%) than NAFTA-positive Canadians (27%), and much less likely to hold a university degree (40% vs. 59%).