Canada’s Index of Wellbeing: A Good Start

… there is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread. For we have been trained too long to strive and not to enjoy. It is a fearful problem for the ordinary person, with no special talents, to occupy himself, especially if he no longer has roots in the soil or in custom or in the beloved conventions of a traditional society.
        – Keynes, Economics Possibilities for our Grandchildren

Updated from original published: 2016.

Flourishing in Canada is dedicated to pressing for public policy and economic approaches based on fostering individual flourishing. A cultural obsession with maximizing GDP leads us to policies and practices that in many cases do not help Canadians’ welfare and that, in some cases, harm it.

Flourishing as a measurement is the ultimate goal – and not an easy goal, given that understanding and measuring flourishing is itself fraught with difficulties. But we are always delighted to see any movement away from GDP, such as the Human Development Index¹⁾ Part of The United Nations Development Programme: Human Development Index. Accessed June 29, 2020. or the World Happiness Report,²⁾See World Happiness Report. Accessed June 29, 2020. as these are all steps in the right direction – thinking more broadly and deeply about what the economy is for and that it serves us to make life better.In Canada, we have had people thinking more deeply. The University of Waterloo’s Centre for the Canadian Index of Wellbeing did critically important work in a study that ran from 1994-2014 to show us that GDP is only tangentially related to improvements in human welfare.³⁾See Canadian Index of Wellbeing. Accessed June 29, 2020.

In fact, in the CIW inaugural report, they noted that while there were significant gains in GDP in 1994-2008, the gains in well-being were modest, demonstrating once again that GDP is a poor measure of an economy. The Canadian Index of Wellbeing is structured upon a framework of 8 dimensions – Education; Living Standards; Community Vitality; Democratic Engagement; Healthy Populations; Time Use; Leisure and Culture; and the Environment.

These dimensions are combined into a single metric, which forms the Canadian Index of Well-Being. The results of the study were fascinating, critically important… and depressing.

In CIW’s methodology, 1994 is indexed to 100. From 1994 to 2008, GDP per capita had grown about 30%. This sounds like terrific progress, with about 2/3% per year in increased incomes. However, every one of the 8 sub-indices had improved less than 30% and, in two cases – Leisure and Culture, and Environment – we had gone backwards, with the index significantly less than 100 in 2008.
In the case of time-use, 2008 was stuck at 100, the same as 1994.

CIW Chart Showing Trends in the Canadian Index of Wellbeing with Eight Domains and Compared with GDP, 1994-2008.⁴⁾From How Are Canadians Really Doing?: The 2012 CIW Report. Accessed June 29, 2020.

Overall, the CWI shows that despite massive gains in income (per capita) Canadians are not much better off – something that many of us feel at a visceral level. CWI’s analysis illustrates vividly why we must move away from GDP-based measures to guide public policy – because development of policy based on measuring the wrong thing will always be sub-optimal.

At the end of the day, policy should be based on pursuing the right objective and looking at the evidence. An excellent example of this is the evidence from Sweden on the six-hour workday.⁵⁾See “Sweden’s 6-Hour Work Day” for discussion and citation. It turns out that output in 6 hours is as good or better than output in 8 (or 10 or 12) hours, something that is not surprising when we consider carefully how long we can concentrate on complex tasks, the type of tasks that form more and more of modern work. And the 6-hour day addresses many of the well-being index issues – leisure time being a key one.

The CIW study ended with clear and continued guidance for a way forward, yet we have seen little meaningful change at the levels of policy and social practice. So please have a look at the work of the Canadian Wellbeing Index.⁶⁾ Canadian Wellbeing Index. Accessed June 29, 2020. They are trying to take us in the right direction and we will all benefit if we listen.

Photo: Elle Neill; Elle Imaging 2016. All rights reserved.