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Scott Reid

Financially, middle-class Canada is awash in a world of hurt Add to ...

Where the economy goes, politics soon follows.

For that simple reason, the issue sure to shape the coming course of Canadian politics was first signalled in May. It arrived with the shocking revelation that Canada's average household debt is greater than even that of Greece, the world's most spectacular welfare case.

Since then, the statistics have piled higher. According to research from the Gandalf Group, 50 per cent of Canadians say their financial situation has deteriorated in the past year and one in five Canadians believe it will worsen further. Just this week, Angus Reid reported that household debt ranks as the primary anxiety on the minds of most middle-class Canadians. Fully 43 per cent of the country says their personal finances are in either poor or very poor shape.

Unfortunately, people's impressions are justified. Economists tell us that household debt in Canada has never stood at higher levels. Not in the recession of the early 1990s or the early 1980s. Not even during the Great Depression. Overdrawn lines of credit. Maxed out charge cards. Borrowing against declining home equity. These are the financial facts of life for most working families. In short, middle-class Canada is struggling to keep its head above water. And it sees waves headed its way.

Nortel was a shock to those who believed their pensions were safe or that you could at least recover your contributions. The costs of child care have never been higher. Elder care figures to become a new line item in most family budgets. Energy prices are headed north. Returns from RRSPs remain grudging. And who can find money for the kids' RESPs?

The economic consequence of all this pent up personal worry is a growing risk that consumers will retreat so deeply, we'll fall into a double-dip recession. American consumers appear particularly tapped out and their outlook, which usually predicts our own, is growing more unsettled.

From a political perspective, these conditions create the potential for explosive upheaval. The middle-class Canadians who next step into the ballot box are feeling distressed, damaged and on their own. They've been unheard by governments. And they're looking for someone who gets what they're going through. So far, the search continues.

From the vigour of the anti-HST campaign in British Columbia, to the second-term challenges of the McGuinty Liberals, to the implausible candidacy of Rob Ford for mayor of Toronto. Disaffection isn't hard to uncover. What Nixon once termed the silent majority is no longer muted. But it's becoming convinced that those in power are deaf.

Still, there's more than anger lurking within today's financially fatigued voters. Feeling vulnerable, they're just as likely to look to government for better services, more help, and a more fairly shared burden as they are to reject any hint of new taxes or insist on a blinkered assault upon the federal deficit.

Here's where the danger lurks for Stephen Harper. The Conservatives mistake this mood as an anti-government backlash and a strict demand for fiscal ratcheting. They brand themselves as sound managers, putting up Action Plan signs in an effort to claim credit. But credit for what? If the economy is improving, people are not feeling it as they sit down each month to balance the family cheque book. Welcome to the "I just can't afford to" generation. Do you really want to assert paternity?

The appeal that's begging to be made is the promise of a new middle-class covenant between the elected and electors. A practical bargain with voters that would see governments commit to deliver to overburdened families a measure of relief and a dose of hope.

It's an agenda that would begin with stronger protection for pensions. With help for the costs of elder and child care. With more muscular emphasis on making higher learning affordable. With a commitment to hold the line on taxes and cease the endless nickel-and-diming that endlessly increases the weight on middle-class wallets.

The Liberals have begun to flirt with such themes. Fresh from their bus tour, there are hints they've heard the sound of a straining middle class. But it remains to be seen if they can capture that concern and translate it into a compelling message and program.

What is certain is this: Household debt is the new statistic of record and middle-class Canada is in a world of hurt. In the months to come, these realities will dictate both our economic future and our next Parliament.

Scott Reid is a principal of the speechwriting firm Feschuk.Reid and former director of communications for Paul Martin.

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