Living standards up by 2001: economists

Continued economic growth combined with cuts to personal income taxes will team up to boost our living standards over the next few years, according to a new report from the TD Bank. This is good news, especially for those who haven’t shared in the booming growth of the last couple of years.

The forecast marks a turnaround from most of the 1990s, which was a disappointing decade in terms of the living standards of Canadians, especially when compared to our American cousins. Our living standards actually fell during the last decade, as many people can attest. Between 1990 and 1999, real personal disposable income per capita in Canada is estimated to have declined by 0.3 per cent per year.

Economists attribute this weak performance to a poor record of job creation and a rising share of personal incomes going to income taxes. In contrast, in the United States, per capita disposable incomes increased at a rapid rate – almost 2 per cent per year in U.S.-dollar terms -during the decade.

The good news is that Canada’s provincial economies are heading into the year 2000 in strong economic and fiscal shape, according to the TD-Bank report’s authors. A healthy pace of job growthimproving wage gains, and further cuts in personal income tax rates at the federal and provincial levels will result in steady increases in living standards over the next few years.

Alberta, Ontario and Newfoundland are expected to lead the country in terms of increases in the standard of living, with all provinces forecasted to post increases over the next few years. The millennium celebrations could be the real start of a new era.